The Figure Below Shows the Cost Curves of a Firm

question 62

Multiple Choice

The figure below shows the cost curves of a firm in a competitive market. The firm always makes the choice to maximize its profit.

-Refer to the figure above.If the price is more than $1.50 but at most $2.00,the firm should produce ________.

• A) 0 units to avoid paying the variable cost
• B) 0 units to break even
• C) the quantity at which the marginal cost equals the price to avoid paying the fixed cost
• D) the quantity at which the marginal cost equals the price, even though the firm would make a loss

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Definitions:

Advocacy Stage

A phase in the consumer decision-making process where individuals or groups promote or support a product, service, or idea.

Loyal Consumers

Customers who repeatedly purchase from a brand or business due to satisfaction, preference, or engagement with the product or service.

Preference

Preference is an individual's choice or priority among different options, often based on factors like taste, convenience, or value.

Repurchase

The act of buying a product or service again, indicating customer loyalty or satisfaction.