Figure 10.4 Figure 10.4 Shows the Cost and Demand Curves for a and Demand

question 109

Multiple Choice

Figure 10.4

Figure 10.4 shows the cost and demand curves for a profit-maximizing firm in a perfectly competitive market.
-Refer to Figure 10.4.If the market price is $30, should the firm represented in the diagram continue to stay in business?

• A)No, it should shut down because it is making a loss.
• B)No, it should shut down because it cannot cover its variable cost.
• C)Yes, because it is covering part of its fixed cost.
• D)Yes, because it is making a profit.

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Definitions:

Hector

To bully or intimidate someone.

100 Units

A quantity measure often used in medical dosing or measurement, the specific nature of which depends on the context, such as units of insulin.

Deka-

Prefix used in the metric system denoting a factor of ten, represented symbolically as "da".