Use the Following to Answer Question

question 87

Multiple Choice

Use the following to answer question:
Figure: Profit Maximization for a Firm in Monopolistic Competition
-(Figure: Profit Maximization for a Firm in Monopolistic Competition) Use Figure: Profit Maximization for a Firm in Monopolistic Competition.Suppose that an innovation reduces a firm's costs from ATC to ATC'.After the innovation reduces the cost,the firm's economic profit at the new profit-maximizing quantity is:

• A)$0.
• B)$30.
• C)$1,500.
• D)$3,000.

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Definitions:

Variable Cost

Costs that vary directly with the level of production or volume of output, such as materials and labor directly involved in manufacturing.

Scatter Diagram

A graphical representation used to show the relationship between two variables, often to identify potential correlations or patterns.

Least-Squares Regression

The least-squares regression is a statistical method used to determine a line of best fit by minimizing the sum of squares created by a mathematical function.

Curvilinear Cost

A cost behavior that does not consistently increase or decrease but varies based on changes in activity level, illustrating a non-linear relationship.