A Perfectly Competitive Firm ________ at the Level of Output

question 369

Multiple Choice

A perfectly competitive firm ________ at the level of output where P = ATC.

• A) earns an economic profit
• B) suffers an economic loss
• C) breaks even
• D) shuts down

---

Definitions:

Equilibrium Price

The price point at which the quantity of a good or service supplied equals the quantity demanded.

Consumer Surplus

The disparity in what consumers are willing to invest in a good or service compared to what they eventually invest.

Demand Shifts

Occur when external factors lead to a change in the amount of a product or service that consumers are willing and able to buy at a given price, resulting in the demand curve moving rightward or leftward.

New Equilibrium

The point at which market supply and demand balance each other, and, as a result, prices become stable following a disturbance.