Asked by
Talwinder Khakh
on Oct 08, 2024
Verified
In the short run,a purely competitive firm will always make an economic profit if:
A) P = ATC.
B) P > AVC.
C) P = MC.
D) P > ATC.
Economic Profit
The difference between total revenue and total economic costs (including both explicit and implicit costs), reflecting the true economic performance of a company.
Purely Competitive
An economic model where numerous small businesses operate, offering identical products, with unrestricted market entry and exit, and complete transparency of information.
Short Run
A period in which at least one input in the production process is fixed and cannot be varied to influence output.
- Analyze the fiscal performance, including surplus, deficit, and the threshold of cost-revenue equality for organizations in competitive environments.
- Evaluate the consequences of market price shifts on a corporation's production planning and profit margins in a context of perfect competition.
Verified Answer
AB
Learning Objectives
- Analyze the fiscal performance, including surplus, deficit, and the threshold of cost-revenue equality for organizations in competitive environments.
- Evaluate the consequences of market price shifts on a corporation's production planning and profit margins in a context of perfect competition.