The Graph Below Depicts the Cost Structure for a Firm

question 325

Multiple Choice

The graph below depicts the cost structure for a firm in a competitive market.
Figure 9-13

Refer to Figure 9-13. When price rises from P₃ to P₄, the firm finds that

• A) fixed costs are lower at a production level of Q₄.
• B) it can earn a positive profit by increasing production to Q₄.
• C) profit is still maximized at a production level of Q₃.
• D) average revenue exceeds marginal revenue at a production level of Q₄.

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