Final Answer:
In a perfectly competitive market where p>ATC, the accurate statement is the firm breaks even in the short run. so the correct option is c. The firm breaks even in the short run.
Step-by-step explanation:
The Firm Breaks Even: In a perfectly competitive market, when the price (p) is greater than the average total cost (ATC), the firm will break even in the short run. This implies that the revenue covers all the costs, including both variable and fixed costs.
Profit and Loss: Option a suggests making a profit, and option b implies incurring a loss. However, in a perfectly competitive market, firms aim to cover their costs rather than make significant profits or losses in the short run. so the correct option is c. The firm breaks even in the short run.
Shutting Down: Option d suggests the firm shuts down in the short run. In a perfectly competitive market, a firm will only shut down if the price falls below the minimum average variable cost (AVC). If p>AVC, the firm will continue to operate in the short run.