Figure 13-10 -Refer to Figure 13-10.In the Long Run,why Will the Firm

question 5

Multiple Choice

Figure 13-10
-Refer to Figure 13-10.In the long run,why will the firm produce Qf units and not Qg units,which has a lower its 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 make 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 a low price and no profit.

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