Consider the purely competitive firm whose data are shown in the accompanying graph. The firm is earning
A)normal profits, since its price is above AVC.
B)economic profits, since its price is above AVC.
C)normal profits, since its price just covers ATC.
D)losses, since it is operating at the shutdown point.

Question

Consider the purely competitive firm whose data are shown in the accompanying graph. The firm is earning
A)normal profits, since its price is above AVC. 
B)economic profits, since its price is above AVC. 
C)normal profits, since its price just covers ATC. 
D)losses, since it is operating at the shutdown point.

Quizplus · Accepted Answer

The Answer of  Consider the purely competitive firm whose data are shown in the accompanying graph. The firm is earning
A)normal profits, since its price is above AVC. 
B)economic profits, since its price is above AVC. 
C)normal profits, since its price just covers ATC. 
D)losses, since it is operating at the shutdown point.

Consider the Purely Competitive Firm Whose Data Are Shown in the Accompanying