Figure 10.17 -Refer to Figure 10.17.In the Long Run, Why Will the Why

question 249

Multiple Choice

Figure 10.17
-Refer to Figure 10.17.In the long run, why will the firm produce Q_f units and not Q_g units, which has a lower average cost of production?

• A)Although its average cost of production is lower when the firm produces Q_g units, to be able to sell its output the firm will have to charge a price below average cost, resulting in a loss.
• B)At Q_g, average cost exceeds marginal cost so the firm will actually incur a loss.
• C)At Q_g, marginal revenue is less than average revenue, which will result in a loss for the firm.
• D)The firm's goal is to charge a high price and make a small profit rather than charge a low price and make no profit.

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Definitions:

Tainos

Indigenous peoples of the Caribbean, the first Native Americans to encounter Christopher Columbus and his men upon their arrival in the New World.

Lucrative Relations

Relationships, either between countries or businesses, that are highly profitable and beneficial to the parties involved.

Civilization

A complex society characterized by the development of forms of government, social stratification, urbanization, and symbolic systems of communication such as writing.

Agricultural Practices

Methods and techniques used in farming to cultivate plants and raise animals for food, fiber, and other products.