Suppose a firm is currently producing at an output level such that the market price is above the firm's average total cost of producing. Then the firm will earn positive economic profits. Select one: True False

Suppose a firm is currently producing at an output level such that the market price is above the firm's average total cost of producing. Then the firm will earn positive economic profits. Select one: True False

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter9: Market Structure And Long-run Equilibrium

Section: Chapter Questions

Problem 1MC

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Concept explainers

Accounting and Economic Profit analysis

One comes across the concept of Profits in the context of business and in analyzing the results of business activity. Profits of a business can be accounting profits, and they can also be economic profits. So how does one understand the concept of accounting versus economic profits?

Question

Suppose a firm is currently producing at an output level such that the market price is above the firm's average total cost of producing. Then the firm will earn positive economic profits.

Select one:

True

False

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