In the short run,a perfectly competitive firm

Question

Quizplus · Accepted Answer

In the short run, a perfectly competitive firm can adjust its output level to maximize profit, which means it can make an economic profit or incur an economic loss depending on the market price and its cost structure. It is possible for the firm to produce at a level where price is greater than average total cost, resulting in a profit. However, in the long run, new firms will enter the market, increasing supply and driving down the market price until all firms earn zero economic profit.

In the Short Run,a Perfectly Competitive Firm