Suppose that in a perfectly competitive market, the market price is $10. A firm in that market has marginal cost of $10, average total cost of $12, and it is producing 100 units. The firm is

A. earning zero total economic profits and is not maximizing economic profits.
B. incurring $200 in total economic losses and is minimizing economic losses.
C. earning $1,000 in total economic profits and is maximizing economic profits.
D. earning $200 in total economic profits and is maximizing economic profits.


Answer: B

Economics

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