When a Firm's Demand Curve Is Tangent to Its Average

question 26

Multiple Choice

When a firm's demand curve is tangent to its average total cost curve, _____.

• A)the firm is operating in a monopolistically competitive market
• B)economic profits are zero
• C)the firm is earning economic profits
• D)the firm is incurring economic losses
• E)price is equal to the marginal cost of production

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Definitions:

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