Asked by
Cesia Ocana
on Nov 30, 2024
Verified
If a perfect competitor's ATC curve is above its demand curve for every possible output the firm is
A) losing money in the short run.
B) losing money in the long run.
C) making a profit in the short run.
D) making a profit in the long run.
ATC Curve
The Average Total Cost (ATC) curve is a graphical representation showing how the average total costs of production for a firm change as the quantity of output produced changes.
Demand Curve
A graphical representation showing the relationship between the price of a good or service and the quantity demanded by consumers.
Perfect Competitor
A theoretical market structure where many firms sell identical products, entry and exit are easy, and all firms are price takers.
- Examine the circumstances in which companies in a perfectly competitive market function, encompassing profit maximization, incurring losses, and achieving long-run equilibrium.
- Distinguish between the characteristics and consequences of short-term and long-term functions for companies operating in a perfectly competitive market.
Verified Answer
AN
Learning Objectives
- Examine the circumstances in which companies in a perfectly competitive market function, encompassing profit maximization, incurring losses, and achieving long-run equilibrium.
- Distinguish between the characteristics and consequences of short-term and long-term functions for companies operating in a perfectly competitive market.