A perfectly competitive firm is definitely earning an economic profit when: – Q/A (Question and Answer)

Answer:

P>ATC

Explanation

P > MCP > ATCP > AVCP > AC

Its total revenue is greater than its total cost, meaning that it is profitable. This is a good thing for the company, as it indicates that it is bringing in more money than it is spending. This can be used to reinvest in the business, pay off debts, or give shareholders a return on their investment.

It’s marginal revenue is greater than its marginal cost.

The reason why Its average revenue is greater than its average cost is because the company is able to generate more revenue than it spends on costs. This is likely due to the company having a strong marketing strategy and/or efficient production processes.

If you’re looking for a firm that outperforms the average company in its industry, you should consider investing in Its output is greater than the output of the average firm in the industry. This company has a strong track record of success, and its products are in high demand. As a result, Its output is greater than the output of the average firm in the industry is a great choice for investors who are looking for above-average returns.

.In a monopolistically competitive market, firms can earn positive economic profits. This is because these firms have some market power and can charge a price above the marginal cost of production. However, these profits are not sustainable in the long run as other firms will enter the market and compete away these profits.

Conclusion

There is no perfectly competitive firm is earning an economic profit.