Exhibit 7-3 Cost Per Unit Curves

question 84

Multiple Choice

Exhibit 7-3 Cost per unit curves

-As shown in Exhibit 7-3,if the product price is either $1.00,$1.50,$2.00,or $4.00,the firm's economic profit is maximum at an output of:

• A) 5 units per day.
• B) 10 units per day.
• C) 15 units per day.
• D) 20 units per day.

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Definitions:

Advertising

The action of calling public attention to products, services, needs, etc., especially by paid announcements in newspapers and magazines, over the radio or television, on billboards, etc.

Long-run Equilibrium

The state in which all inputs are variable, allowing firms to make adjustments and the market to clear.

Efficient Scale

The level of production at which average total costs are minimized.

Elasticity Of Demand

Elasticity of demand measures how the quantity demanded of a good changes in response to changes in its price.