Question

If the short-run market supply curve and the demand curve intersect above the long-run market supply curve, firms will experience ________ economic profits, meaning the price is ________ the minimum point on the average total cost curve.

Answer 1

Positive and above, are the right answers.

Step-by-step explanation:

In the short run price, the more than the price of long-run equilibrium hat means the firm is making an economic profit in the short run, and the price charged is more than the minimum of the average total cost. However, this positive economic profit will become zero in the long run because firms enter the market after looking at the positive economic profit. And this entry keeps continuing until the economic profit becomes zero