The Following Question Are Based on the Following Graph, Showing

question 48

Multiple Choice

The following question are based on the following graph, showing short-run supply and demand curves for a perfectly competitive market. The initial supply curve is labeled "Supply" and the initial demand curve is labeled "Demand." Price 0A and output rate 0X represent the initial equilibrium price and output.

-For a typical producer in this market

• A) marginal cost equals 0A.
• B) average total cost is less than 0A.
• C) average total cost is greater than 0A.
• D) long-run average cost equals the supply curve.
• E) average total cost equals the supply curve.

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