The Graph Shown Represents the Cost and Revenue Curves of a Firm

question 74

Multiple Choice

The graph shown represents the cost and revenue curves of a firm in a perfectly competitive market. If the firm is producing at Q2:

• A)profits are being maximized.
• B)average total costs are minimized.
• C)it is producing at an efficient scale.
• D)All of these are correct.

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Definitions:

Wholly Owned

A company or entity that is 100% owned by another company or individual.

Vertical Boycott

An anti-competitive practice where companies at different supply chain levels agree not to deal with a particular company or group.

Sherman Act

A landmark federal statute in the anti-trust law of the United States that prohibits monopolistic practices and promotes competition.

Price-Cutter

An individual or company that significantly reduces the prices of goods or services, typically to attract more customers or to outcompete rivals.