-In the Above Figure, at Any Price Between $8 Per

question 171

Multiple Choice

-In the above figure, at any price between $8 per unit to $12 per unit, how many units will a profit-maximizing perfectly competitive firm produce?

• A) None, because the producer will never choose to operate at a loss.
• B) Less than 20 because this will reduce marginal cost.
• C) Between 20 and 30, because variable costs are covered so the firm's losses will be minimized by producing rather than shutting down.
• D) More than 30, because variable costs are covered so that the producer can earn economic profits.

---

Definitions:

Market Structures

The organizational and competitive characteristics of markets, including aspects like the number of sellers and degree of product differentiation.

Demand Curve

A graphical representation of the relationship between the price of a good and the quantity demanded, typically downward sloping, showing an inverse relationship between price and quantity demanded.

Concentration Ratio

A measure used in economics to assess the extent of market control by the top firms in an industry.

Oligopolies

A market structure characterized by a small number of large firms that dominate the market, often leading to limited competition and higher prices.