If a competitive firm is selling 250 units of its product at a price of $22...

If a competitive firm is selling 250 units of its product at a price of $22 per unit and earning zero economic profit, then

its average total cost is equal to $22.

its average total cost is less than $22.

its average variable cost is equal to $22.

its average total cost is more than $22.

Solutions

Expert Solution

its average total cost is equal to $22.

Explanation :

Perfectly competitive firm earns zero economic profit in long run. So price =ATC.

Here price is 22.so ATC will be 22.

Profit =(Price - ATC) *quantity

=(22-22)*250

=0.

Rahul Sunny answered 1 year ago

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