Use the Figure to Answer the Following Question(s)

question 458

Multiple Choice

Use the figure to answer the following question(s) .
Figure 9-6

The average total cost ( ATC ) and marginal costs ( MC ) of a firm producing in a price-taker industry are depicted in Figure 9-6. If the current market price of the firm's product is $15, what output should this firm produce?

• A) 10
• B) 15
• C) 20
• D) 25

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Definitions:

Product Demand Elasticity

A measure of how sensitive the quantity demanded of a product is to changes in its price.

Marginal Productivity Theory

An economic theory that explains how the value of a productive input is determined by its contribution to the total output.

Income Distribution

The way in which total income is divided among the members of a society.

Marginal Contribution

The additional amount of revenue or benefit generated by utilizing one more unit of a resource or producing one additional unit of a product.