Question

Assume that at the current market price, a perfectly competitive firm's profit-maximizing level of output yields total revenues that are just equal to total costs. Which of the following statements applies to this firm?a. The firm should shut down right now.b. The firm should continue to operate in the short run to minimize losses, but shut down if things don't improve over the long run.c. The firm is earning zero economic profit and should continue to operate.d. The firm should increase its explicit costs to reduce its tax burden.

Answer 1

c. The firm is earning zero economic profit and should continue to operate.

Step-by-step explanation:

This is because at that point firm has not earned any profit or facing a loss.