If a competitive firm is operating at its efficient scale, then is the firm's profit positive, zero, or negative?

Efficient Scale

The level of production that minimizes the average total cost of production, optimizing resource usage.

Competitive Firm

A company that operates in a market where prices are determined through competition amongst businesses.

Firm's Profit

The financial gain a company achieves when its total revenues exceed the total costs incurred in conducting its business activities.

Determine the economic outcomes, either profit or loss, for companies engaged in competitive sectors.
Analyze the factors that influence companies to enter, persist in, or withdraw from a market.

Verified Answer

Final Answer :

Profit is zero for a competitive firm operating at its efficient scale.

Learning Objectives

Determine the economic outcomes, either profit or loss, for companies engaged in competitive sectors.
Analyze the factors that influence companies to enter, persist in, or withdraw from a market.