The Following Question Are Based on the Following Diagram Showing

question 40

Multiple Choice

The following question are based on the following diagram showing the short-run cost curves for a perfectly competitive firm:

-At what price per unit would the firm find it no more profitable to operate than NOT to operate?

• A) $1
• B) $2
• C) $3
• D) $4
• E) $5

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Definitions:

Relevant Range

The span of activity or production volume over which fixed and variable costs remain constant on a per-unit basis.

Direct Costs

Direct costs are expenses that can be directly attributed to the production of specific goods or services, such as raw materials and labor.

Merchandising Company

A business that purchases finished goods for resale, aiming to make a profit without changing the form of the goods.

Cost of Goods Sold

The direct costs related to the production of the goods that a company sells, including materials and labor.