If a Representative Firm with Total Cost Given by TC

question 10

Multiple Choice

If a representative firm with total cost given by TC = 20 + 20q + 5q² operates in a competitive industry where the short-run market demand and supply curves are given by Q_D = 1,400 - 40P and Q_S = -400 + 20P,its short-run profit-maximizing level of output is:

• A) 0 units.
• B) 1 unit.
• C) 2 units.
• D) 4 units.
• E) 6 units.

---

Definitions:

Overfarmed

A condition where land is used for agriculture to an excessive extent, leading to degradation of soil quality and diminished crop yields.

Overgrazed

Describes land that has been excessively used by grazing animals, leading to environmental degradation.

Desert

A barren area of landscape where little precipitation occurs, and consequently, living conditions are hostile for plant and animal life.

Production Possibilities Curve

A graphical representation that shows the maximum combination of goods and services that can be produced with a given set of resources and technology, illustrating the concept of opportunity cost.