(Figure: The Perfectly Competitive Firm) Use Figure: The Perfectly Competitive Firm.The figure shows a perfectly competitive firm that faces demand curve d and maximizes profit.The firm's economic profit in the long run will be:

A) $0.
B) $250.
C) $275.
D) $300.

Question

gurneet singh · Accepted Answer

Final Answer : A, Explanation :  In the long run, perfectly competitive firms earn zero economic profit due to free entry and exit of firms in the market. The firm's average total cost curve intersects the demand curve at the minimum point of the average total cost curve, which is at a quantity of 600. At this quantity, the price is $5 and the average total cost is $5, resulting in zero economic profit.

(Figure: The Perfectly Competitive Firm) Use Figure: The Perfectly Competitive Firm.The figure shows a perfectly competitive firm that faces demand curve d and maximizes profit.The firm's economic profit in the long run will be:

A) $0.
B) $250.
C) $275.
D) $300.

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Learning Objectives

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(Figure: The Perfectly Competitive Firm) Use Figure: The Perfectly Competitive Firm.The figure shows a perfectly competitive firm that faces demand curve d and maximizes profit.The firm's economic profit in the long run will be:A) $0.B) $250.C) $275.D) $300.

Definitions

Learning Objectives

Learning Objectives

Related questions

(Figure: The Perfectly Competitive Firm) Use Figure: The Perfectly Competitive Firm.The figure shows a perfectly competitive firm that faces demand curve d and maximizes profit.The firm's economic profit in the long run will be:

A) $0.
B) $250.
C) $275.
D) $300.