Figure 9-4 Figure 9-4 Shows the Cost and Demand Curves for a and Demand

question 229

Multiple Choice

Figure 9-4

Figure 9-4 shows the cost and demand curves for a profit-maximizing firm in a perfectly competitive market.
-Refer to Figure 9-4.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:

Central Point of Accountability

The specific position or individual within an organization assigned the responsibility for overseeing the successful achievement of certain objectives or tasks.

Functional Structure

An organizational design where the company is divided into departments based on specialized functions, such as marketing, finance, or operations.

Economies of Scale

The cost advantages that enterprises obtain due to size, output, or scale of operation, with cost per unit of output generally decreasing with increasing scale as fixed costs are spread out over more units of output.

Expertise

Refers to the high level of knowledge or skill in a particular field or domain, acquired through training, experience, or study.