Figure 9-17 -Refer to Figure 9-17.In the Long Run,why Will the Firm

question 340

Multiple Choice

Figure 9-17
-Refer to Figure 9-17.In the long run,why will the firm produce Qf units and not Qg units,which has a lower average cost of production?

• A) Although its average cost of production is lower when the firm produces Qg 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 Qg, average cost exceeds marginal cost so the firm will actually incur a loss.
• C) At Qg, 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:

Protectorates

A protectorate is a state or territory that is protected and partly controlled by a stronger state but is not owned by it.

Indigénat

The legal system used by the French colonial empire to impose civil penalties on indigenous populations, notably in North Africa.

French Algeria

Refers to the period from 1830 to 1962 when Algeria was a colony and then a department of France, leading to a long struggle for independence.

Leopold II

The king of Belgium from 1865 to 1909, best known for his exploitation of the Congo Free State as a private venture.