-Refer to the Above Figure

question 123

Multiple Choice

-Refer to the above figure. Which diagram shows the effect on the market of Corn Flakes when the price of Corn Flakes has increased?

• A)graph C
• B)graph D
• C)neither graph
• D)both graphs

---

Definitions:

MC = ATC

The condition where marginal cost equals average total cost, often used to identify the point of minimum average cost in the short run.

Zero Profits

A situation where a company's total revenues equal its total costs, meaning it is breaking even and not generating any profit.

P = MC

An equation that states that the price (P) of a product is equal to its marginal cost (MC), indicating the point at which the production of one more unit of a good or service is exactly covered by the sale price, often used in the context of perfect competition markets.

MC > ATC

Denotes a situation in which the marginal cost of producing an additional unit of a good is greater than the average total cost, implying that producing more of the good will increase the per unit cost.