This Graph Represents the Cost and Revenue Curves of a Firm

question 73

Multiple Choice

This graph represents the cost and revenue curves of a firm in a perfectly competitive market. According to the graph shown,if a firm is producing at Q1:

• A) profits are being maximized.
• B) average total costs exceed the market price.
• C) the firm should not increase production because it will earn loss.
• D) marginal revenue is greater than average total cost.

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Definitions:

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