Refer to the graph that depicts Joe’s family restaurant in a perfectly competitive market. If price is P3, the profit-maximizing output Multiple Choice A. the firm is earning a positive profit. B. the firm has zero profits. C. the firm is earning a loss then a profit. D. the firm is suffering a loss.

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Imperfect Competition

Imperfect competition is relatively easier to understand once people have the knowledge of perfect competition. When the five conditions of perfect competition are not made, that market structure is said to be imperfect competition.