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

question 265

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 falls from P3 to P1, the firm finds that it

• A)decreases its fixed costs.
• B)should produce Q1 units of output.
• C)should produce Q3 units of output.
• D)should shut down immediately.

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