Under perfect competition, if the AR curve lies below the AC curve, the firm would _______.
A
make only normal profit
No worries! We‘ve got your back. Try BYJU‘S free classes today!
B
incur losses
No worries! We‘ve got your back. Try BYJU‘S free classes today!
C
make super normal profit
No worries! We‘ve got your back. Try BYJU‘S free classes today!
D
firm cannot determine profit
Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses
Open in App
Solution
The correct option is D firm cannot determine profit Under perfect competition, if average revenue curve is below the average cost curve then the firm will be incurring losses and the firm will not be able to determine the profit from the market.