The Figure Below Shows the Cost Curves of a Firm

question 47

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 market price of the product is $1.50,the firm's profit maximizing output is ________ and its maximum profit is ________.

• A) 1,200 units; -$900
• B) 1,100 units; -$300
• C) 900 units; $0.00
• D) 0 or 900 units; -$600

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Definitions:

Corporations

Legal entities that are separate from their owners, with the ability to own property, incur liabilities, and sell stock.

Corporation

A business firm that is a legal person. Its chief advantage is that each owner’s liability is limited to the amount of money he or she invested in the company.

Stockholders

Individuals or entities that own shares in a corporation, possessing ownership interests and rights to dividends.

Owned

The state of having legal rights to possess, use, and control a property or asset.