If, for a firm in perfect competition, the price, the marginal cost, and the average total cost are all equal to $9, then:
A) the firm should increase production in order to reduce average total cost.
B) the firm should shut down.
C) the firm should reduce production in order to raise the price of the product.
D) the firm is just breaking even.

Question

Quizplus · Accepted Answer

In perfect competition, if the price equals both marginal cost and average total cost, the firm is covering all its costs, including normal profit, and is breaking even.

If, for a Firm in Perfect Competition, the Price, the Marginal