Suppose the firm faces a price of $38, an average variable cost of $29, and has...
Suppose the firm faces a price of $38, an average variable cost of $29, and has an average fixed cost of $5. In the short-run, the firm
A. will earn an economic profit
B. will be unable to determine what to do
c. will just cover cost
D. none of the above
Homework Answers
ATC = AVC+AFC = 29 + 5 = 34
P = 38
As P > ATC,
Firm will earn profit
Therefore correct answer is option A
Add Answer to:
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