If a perfectly competitive firm is currently producing where ________, then the firm will earn zero profits. A) P MC and MC = ATC B) P = MC and MC = ATC C) P = MC and MC

Question

If a perfectly competitive firm is currently producing where ________, then the firm will earn zero profits. A) P > MC and MC = ATC B) P = MC and MC = ATC C) P = MC and MC < ATC D) P < MC and MC > ATC

Quizplus · Accepted Answer

In a perfectly competitive market, if a firm is producing at a point where the price (P) equals the marginal cost (MC) and the marginal cost equals the average total cost (ATC), the firm is operating at the point where economic profits are zero. This is because the price covers all variable and fixed costs, leaving no surplus.

If a Perfectly Competitive Firm Is Currently Producing Where ________