-In the Above Figure, If the Price Is $12, a Profit-Maximizing

question 181

Multiple Choice

-In the above figure, if the price is $12, a profit-maximizing perfectly competitive firm will have an economic profit

• A) of less than $100 but more than $0.
• B) of more than $100.
• C) that is negative, that is, it will have an economic loss.
• D) of zero, that is, it will break even with a normal profit.

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Definitions:

Price Ceiling

A government-imposed limit on how high a price is charged for a product, commodity, or service.

Equilibrium Price

The price at which the quantity of a good demanded by consumers equals the quantity supplied by producers, resulting in a stable market condition.

Price Ceiling

A legal maximum price that can be charged for a good or service, intended to protect consumers from high prices.

Price Ceiling

A legal maximum price that can be charged for a good or service, typically set by government.