For a perfectly competitive firm in the short run, if the firm produces the quantity at...
For a perfectly competitive firm in the short run, if the firm produces the quantity at which:
\ options: 1) P > ATC, then the firm is profitable. 2) P < ATC, then the firm breaks even. 3) P = ATC, then the firm incurs a loss. 4) P < ATC, then the firm is profitable.
Homework Answers
Profit = (P-ATC)*Q
When P > ATC, firm earns profit
When P = ATC, firm achieves breakeven
When P < ATC, firm is suffering Losses
option 1 is correct answer ie. P > ATC, then the firm is profitable
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