Figure 104 Figure 10

question 2

Multiple Choice

Figure 10.4 Figure 10.4 shows short-run cost and demand curves for a monopolistically competitive firm in the market for designer watches.
-Refer to Figure 10.4.Should the firm represented in the diagram continue to stay in business despite its losses?

• A)No, it should shut down.
• B)Yes, its total revenue covers its variable cost.
• C)No, it is not able to cover its fixed cost.
• D)Yes, it should increase its revenue by raising its price.

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Definitions:

Instincts

In Freud’s system, mental representations of internal stimuli, such as hunger, that drive a person to take certain actions.

Conscious

The state of being aware of and able to think about one's own thoughts, feelings, and perceptions.

Psychic Energy

A concept in psychoanalysis that describes the energy derived from instinctual drives and instincts, influencing and driving human behavior.

Cathexis

An investment of psychic energy in an object or person.