Figure 10-15 Figure 10-15 Shows the Cost and Demand Curves

question 265

Multiple Choice

Figure 10-15
Figure 10-15 shows the cost and demand curves for the Erickson Power Company.
-Refer to Figure 10-15.Why won't regulators require that Erickson Power produce the economically efficient output level?

• A) because there is insufficient demand at that output level
• B) because at the economically efficient output level, the marginal cost of producing the last unit sold exceeds the consumers' marginal value for that last unit
• C) because Erickson Power will earn zero profit
• D) because Erickson Power will sustain persistent losses and will not continue in business in the long run

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