If a perfectly competitive firm's average total cost is less than the price, then the firm
A) incurs an economic loss.
B) makes an economic profit.
C) makes zero economic profit.
D) makes either zero economic profit or an economic profit depending on whether the marginal revenue is equal to or greater than the price.
E) None of the above answers is correct because the relationship between the price and average total cost has nothing to do with the firm's profit.
B
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Long-run unemployment in the classical model is considered to be impossible because
A) flexible prices and wages keep workers fully employed. B) the government will intervene to aid the unemployed. C) job placement and training programs are rampant in the United States. D) the labor supply is horizontal.
The key idea of the real business theory is that potential output itself will remain stable over time
Indicate whether the statement is true or false