Figure 14-4 Suppose a Firm Operating in a Competitive Market Has the Has

question 350

Multiple Choice

Figure 14-4
Suppose a firm operating in a competitive market has the following cost curves:
-Refer to Figure 14-4. When price rises from P2 to P3, the firm finds that

• A)marginal cost exceeds marginal revenue at a production level of Q2.
• B)if it produces at output level Q3 it will earn a positive profit.
• C)expanding output to Q4 would leave the firm with losses.
• D)it could increase profits by lowering output from Q3 to Q2.

---

Definitions:

Categorical Data

Data that represent characteristics and can be divided into groups or categories.

Quantitative Data

Numerical data that can be measured or counted and used for mathematical calculations and statistical analysis.

Sample Mean

The average value of a set of observations taken from a sample.

Population

All the members or elements that are examined as part of a statistical study.