Plot Four Points, in Each of Which the Second Component

question 186

Multiple Choice

Plot four points, in each of which the second component is twice the first component. Connect the plotted points. Which graph could be a correct graph?

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Definitions:

Marginal Revenue

The increase in earnings resulting from the sale of one extra good or service.

Economic Profit

the difference between total revenue and total opportunity costs; a measure of profit beyond the normal return on investment.

Marginal Cost

The addition to total cost from producing one additional unit of a product.

Perfectly Competitive Firm

A perfectly competitive firm operates in a market where there are many buyers and sellers, the product is homogenous, and there is free entry and exit from the market.