The Figure Depicts a Firm in a Price-Taker Market

question 23

Multiple Choice

The figure depicts a firm in a price-taker market. Use this figure to answer the following question(s) .
Figure 9-18

Refer to Figure 9-18. At the profit-maximizing level of output, the firm will earn an economic (Hint: Areas in the exhibit are referenced by the four letters on the corners of the respective area.)

• A) profit of AHEC.
• B) profit of BIFC.
• C) loss of AHEC.
• D) loss of BIFC.

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Definitions:

Equilibrium Quantity

The quantity of goods or services supplied is equal to the quantity demanded at the market equilibrium price.

Demand Increases

A situation wherein there is a rise in the quantity of a product or service sought after by consumers at a given price level.

Equilibrium Price

The price level at which the amount of products available for sale matches the amount consumers want to buy.

Equilibrium Quantity

The quantity of goods or services supplied that is exactly equal to the quantity demanded at the market equilibrium price.