Figure 14-5 Suppose a Firm Operating in a Competitive Market Has the Has

question 404

Multiple Choice

Figure 14-5
Suppose a firm operating in a competitive market has the following cost curves:
-Refer to Figure 14-5. When market price is P7, a profit-maximizing firm's short-run profits can be represented by the area

• A)P7 × Q5.
• B)P7 × Q3.
• C)(P7 - P5) × Q3.
• D)We are unable to determine the firm's profits because the quantity that the firm would produce is not labeled on the graph.

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