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Firms minimize costs; thus, a firm earning short-run economic profits will choose to produce at the minimum point on its average total cost curve. Do you agree or disagree with this statement? A. Disagree: Firms earning profits will produce to the right of the minimum point on the average total cost curve. B. Disagree: A firm minimizing costs will produce where marginal cost equals the average total cost of production C. Disagree: Firms earning short-run profits will produce where the difference between price and MC is largest. D. Disagree: The minimum point on the average total cost curve is when output equals zero. E. Agree: Since firms seek to minimize costs, they will always produce at the minimum point on the ATC curve.

Respuesta :

Answer:

A. Disagree: Firms earning profits will produce to the right of the minimum point on the average total cost curve.

Explanation:

Firms minimize costs; thus, a firm earning short-run economic profits will NOT choose to produce at the minimum point on its average total cost curve rather Firms earning profits will produce to the right of the minimum point on the average total cost curve because it is at this point that Marginal Cost will equal Marginal Revenue which is the profit maximizing equation for firms in the short run.

Answer:

Option A is correct.

Explanation:

This is producing to the right of minimum point of the average total cost curve because average variable cost would be at the lowest minimal and profit would tend towards maximum for the short run .

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