Use the figure below to answer the following questions. Figure 13.2.3 -Refer to Figure 13.2.3.Assume this firm faces demand curve D₁.At the profit-maximizing output level,the firm A)incurs an economic loss. B)makes zero economic profit. C)makes an economic profit. D)makes less economic profit than that earned by firms in perfect competition. E)makes an unknown economic profit that is impossible to determine without information concerning the price charged by the rival firms.

Question

Quizplus · Accepted Answer

At the profit-maximizing output level, the firm makes an economic profit if the price on the demand curve D₁ is above the average total cost at that output level.

Use the Figure Below to Answer the Following Questions