The Figure Given Below Shows the Revenue and Cost Curves

question 6

Multiple Choice

The figure given below shows the revenue and cost curves of a perfectly competitive firm.Figure 10.5
MC: Marginal cost curve
MR: Marginal revenue curve.ATC: Average-total-cost curve
AVC: Average-variable-cost curve
-Assume the price facing the firm in Figure 10.5 is P_1.Which of the following statements is true?

• A)Total revenue for the firm is area 0BDQ₁.
• B)The firm should produce Q₂.
• C)Total cost for the firm is area 0P₁EQ₁.
• D)The firm's total revenue is more than sufficient to cover its variable costs, so it should remain in operation.
• E)The firm should shut down because price per unit received is less than average total cost.

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Definitions:

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