Consider a Firm Operating Where P = 10, MR =

question 79

Multiple Choice

Consider a firm operating where P = 10, MR = 10, MC = 10 and ATC = 10 (and there is no fixed cost) . This firm is:

• A) making an economic profit of 10.
• B) an example of monopolistic competition.
• C) going to go out of business in the long run.
• D) perfectly competitive in long-run equilibrium.

---

Definitions:

Market Price

The market price is the current price at which an asset or service can be bought or sold in a given market.

Consumer Surplus

The difference between the total amount consumers are willing and able to pay for a good or service and the total amount they actually pay.

Willing to Pay

The maximum price at which a consumer values a good or service enough to purchase it.