Use the Figure Below to Answer the Following Question

question 87

Multiple Choice

Use the figure below to answer the following question.

Figure 12.2.1
-Refer to Figure 12.2.1, which shows a perfectly competitive firm's total revenue and total cost curves. Which one of the following statements is false?

• A)Economic profit is the vertical distance between the total revenue curve and the total cost curve.
• B)At an output of Q₁ units a day, the firm makes zero economic profit.
• C)At an output greater than Q₃ units a day, the firm incurs an economic loss.
• D)At an output of Q₂ units a day, the firm incurs an economic loss.
• E)At an output less than Q₁ units a day, the firm incurs an economic loss.

---

Definitions:

Promotion-to-Sales Ratio

A metric analyzing the effectiveness of promotional activities by comparing the cost of promotion to the generated sales revenue.

Competitive Parity

A marketing strategy where a company matches the benefits or price points of its competitors to maintain or achieve competitive advantage.

Percentage of Sales

A financial metric that shows how much of a company's sales are generated over a period, often used to allocate marketing budget.

Objective and Task

A method for budgeting advertising expenses based on defining specific objectives and the tasks required to achieve them.