Figure 16-1

question 404

Multiple Choice

Figure 16-1. The figure is drawn for a monopolistically competitive firm.

-Refer to Figure 16-1.If the average variable cost is $12 at the profit-maximizing quantity,and if the firm's fixed costs amount to $30,then the firm's maximum profit is

• A) $-30.
• B) $22.
• C) $36.
• D) $42.

---

Definitions:

Electric Power Plant

A facility that generates electricity through various energy sources like coal, natural gas, nuclear, solar, or wind power.

Kilowatt-hours

A unit of energy equivalent to one kilowatt of power expended for one hour, commonly used to measure electricity consumption.

Fixed Costs

Fixed charges that stay steady irrespective of the amount of goods produced or sold, such as property leases, payroll, and indemnity costs.

Peak-period Capacity

The maximum output level that a company can sustain during the busiest period without increasing long-term fixed costs.