Table: Oil Production Costs Refer to the Table

question 19

Multiple Choice

Table: Oil Production Costs $$\begin{array} { c c c c } \hline \begin{array} { c } \text { Barrel of Oil } \\\text { Produced }\end{array} & \begin{array} { c } \text { Marginal } \\\text { Revenue }\end{array} & \begin{array} { c } \text { Marginal } \\\text { Cost }\end{array} & \begin{array} { c } \text { Average } \\\text { Costs }\end{array} \\\hline 1 & \$ 50 & \$ 4 & \$ 34 \\2 & 50 & 6 & 40 \\3 & 50 & 11 & 17 \\4 & 50 & 17 & 17 \\5 & 50 & 23 & 18.20 \\6 & 50 & 29 & 20 \\7 & 50 & 36 & 22.29 \\8 & 50 & 50 & 25.75 \\9 & 50 & 90 & 32.89 \\10 & 50 & 124 & 42 \\\hline\end{array}$$ Refer to the table. If seven barrels of oil are produced, this firm is making:

• A) a profit because P >AC.
• B) a loss because MC > AC.
• C) a profit because MR > MC.
• D) a loss because TR < TC.

---

Definitions:

Short-Term Drowsiness

A temporary state of feeling sleepy or lethargic, often resulting from inadequate sleep, boredom, or certain medications.

Prescription Drug

Medication that legally requires a medical prescription to be dispensed.

Back Pain

A common physical ailment involving discomfort or pain in the lower, middle, or upper back, possibly stemming from muscular, skeletal, or neurological causes.

Mental Processes

The internal, covert activities of our minds, such as thinking, feeling, and problem-solving.