Graph 15-2 This Graph Reflects the Cost and Revenue Structure

question 197

Multiple Choice

Graph 15-2
This graph reflects the cost and revenue structure for a monopoly firm. Use the graph to answer the following question(s) .
-Refer to Graph 15-2. If the monopoly firm is currently producing output at a level of Q₃, reducing output will always cause profit to:

• A) increase as long as output is at least Q₂
• B) increase as long as output is at least Q₁
• C) remain unchanged
• D) decrease

---

Definitions:

Sales

Transactions involving the exchange of goods or services for money or other compensation.

First Quarter

The initial three-month period in a fiscal year; often used in financial reporting and analysis.

Service Business

A type of business that provides intangible products or services to consumers, as opposed to selling physical goods.

Overhead

General, ongoing business expenses not directly attributed to creating a product or service, including rent, utilities, and insurance.