Figure 11.10 -Refer to Figure 11.10.In the Long Run, Why Will the Run

question 131

Multiple Choice

Figure 11.10

-Refer to Figure 11.10.In the long run, why will the firm produce Qf units and not Qg units, which has a lower its average cost of production?

• A)Although its average cost of production is lower when the firm produces Qg units, to be able to sell its output the firm will have to charge a price below average cost, resulting in a loss.
• B)At Qg, average cost exceeds marginal cost so the firm will actually make a loss.
• C)At Qg, marginal revenue is less than average revenue which will result in a loss for the firm.
• D)The firm's goal is to charge a high price and make a small profit rather than a low price and no profit.

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Definitions:

Sandy Surface

An area covered with or consisting of sand, often found in deserts, beaches, or as a soil composition.

Glass

A hard, brittle material typically made by melting sand with silicates, used in windows, bottles, and many other objects.

Wehrmacht

The unified armed forces of Nazi Germany from 1935 to 1945, comprising the Heer (army), Kriegsmarine (navy), and the Luftwaffe (air force).

Berlin

The capital and largest city of Germany, known for its history, culture, and role in global politics.