Graph 14-4 the Graph Depicts the Cost Structure of a of a Firm

question 149

Multiple Choice

Graph 14-4
The graph depicts the cost structure of a firm in a competitive market. Use the graph to answer the following question(s) .
-Refer to Graph 14-4. When market price is P₂, a profit-maximising firm's losses can be represented by the area:

• A) (P₃ - P₂)*Q₂
• B) (P₂ - P₁) *Q₂
• C) at a market price of P₂, the firm does not have losses
• D) at a market price of P₂, the firm has losses, but the reference points in the graph don't identify the losses

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Definitions:

Random Variable

A random variable is a variable whose values depend on outcomes of a random phenomenon.

Manufacturer

An entity or company that makes goods for sale through the process of manufacturing.

Net Income

The amount of profit that remains after all operating expenses, taxes, and interest have been deducted from total revenue.

Random Variable

A variable that can take on different values randomly, subject to a certain probability distribution.