The Following Figure Shows the Marginal Cost Curve and the Average

question 247

Multiple Choice

The following figure shows the marginal cost curve and the average total cost curve of a firm operating in a perfectly competitive industry.

-Refer to the figure above.Which of the following statements is true?

• A) The firm maximizes profits if it produces 10 units of the good.
• B) If the market price is $10, the firm will suffer losses.
• C) If the market price is $2, the firm will make profits.
• D) The firm makes maximum profits if it produces 30 units.

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Definitions:

Chose in Action

A personal right to property which can only be claimed or enforced through legal action, not by taking physical possession.

Intellectual Property

Refers to creations of the mind, such as inventions; literary and artistic works; designs; and symbols, names, and images used in commerce.

Affixed

Affixed means to be attached or securely connected to something else, typically in a permanent or semi-permanent manner.

Joint Tenants

A form of property co-ownership where each party has an equal share and the right of survivorship.