Answer to Question #317575 in Microeconomics for amcee

Question

the situation in which a firm makes an economic profit is a identified as one of the possibe short run positions of a firm under perfect competiton illustrate the given short run position and explain the situation with reference to your graph

Answer 1

A firm makes economic profit in the short run when it's price is just equal to the minimum of the average cost while still above the average variable cost. At this point, it can cover all of its total costs with it's total revenue

This is represented in the diagram below: