Figure 9-B -Refer to Figure 9-B.The Graph Illustrates a Firm in Long-Run

question 80

Multiple Choice

Figure 9-B
-Refer to Figure 9-B.The graph illustrates a firm in long-run equilibrium.Which of the following statements is true?

• A)The firm is making a normal profit, output is q*; D = MC, and MR = LRATC at q*.
• B)The firm is making a loss, output is q*; D = MC, and MR = LRATC.
• C)The firm is making a normal profit, output is q*; D = LRATC, and MR = MC at q*.
• D)The firm is making a loss, output is q*; D = LRATC, and MR = MC at q*.
• E)The firm is making an above-normal profit, output is q*; D = LRATC, and MR = MC at q*.

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Definitions:

Calls in Advance

Money received by a company from shareholders before their shares have been issued to them, often applied towards future calls on shares.

Share Issuance Costs

Expenses associated with the issuance of new shares, such as underwriting, legal, and registration fees.

Financial Statements

Formal records of financial activities and position of a business, person, or other entity, presenting the financial results over a specific period.

Forfeited Shares

Shares that are surrendered or taken back by a company from an investor because of the non-fulfillment of purchase conditions or agreements.