Consider the Total Cost and Revenue Curves Shown Below,for Two

question 142

Multiple Choice

Consider the total cost and revenue curves shown below,for two perfectly competitive firms,Firm A and Firm B. FIGURE 9-4
-Refer to Figure 9-4.Given its total cost and revenue curves,Firm B should

• A)exit the industry.
• B)shut down temporarily.
• C)maximize its profits by producing that level of output such that the slope of the TC curve is equal to the slope of the TR curve.
• D)maximize its profits by producing that level of output such that the slope of the TVC curve is equal to the slope of the TR curve.
• E)produce the level of output where the TC curve intersects the TR curve.

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Definitions:

Franchise Agreement

A legal contract in which a franchisor grants the right to operate a business using its brand, system, and support to a franchisee in return for fees.

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The act of using threats or intimidation to compel someone to provide money, property, or favors against their will.

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