If a firm produces at an output level where price exceeds average total cost, then it makes an economic profit.

Name: If a firm produces at an output level where price exceeds average total cost, then it makes an economic profit.
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Question

Quizplus · Accepted Answer

Economic profit is the difference between total revenue and total cost. If price exceeds average total cost, then the firm is collecting more revenue per unit than it costs to produce that unit, resulting in a positive economic profit.

If a Firm Produces at an Output Level Where Price