Consider the Total Cost and Revenue Curves Shown Below, for Two

question 46

Multiple Choice

Consider the total cost and revenue curves shown below, for two perfectly competitive firms, Firm A and Firm B. FIGURE 9- 5
-Refer to Figure 9- 5. Given its total cost and revenue curves, Firm B should

• A) shut down temporarily.
• B) maximize its profits by producing that level of output such that the slope of the TVC curve is equal to the slope of the TR curve.
• C) produce the level of output where the TC curve intersects the TR curve.
• D) maximize its profits by producing that level of output such that the slope of the TC curve is equal to the slope of the TR curve.
• E) exit the industry.

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