The Following Figures Show the Demand and Cost Curves of a Perfectly

question 73

Multiple Choice

The following figures show the demand and cost curves of a perfectly competitive and a monopoly firm respectively. Figure 24.7 D: Average Revenue
AC: Average cost
MC: Marginal cost
MR: Marginal cost
According to Figure 24.7, which of the following statements is incorrect about the price P₁?

• A)The monopolist is maximizing profit at P_1.
• B)In the long run, firms will leave the perfectly competitive industry and force the price upward.
• C)The monopolist is earning normal profit at P_1.
• D)Both the firms maximize their profits at P_{1 .}
• E)The perfectly competitive firm would produce 10 units of output at P_1.

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Definitions:

Correlation Coefficient

A numerical indicator that shows the level at which two or more variables move in unison.

Working Memory Capacity

Working Memory Capacity denotes the amount of information that can be temporarily held and manipulated in the mind for cognitive tasks such as problem-solving, reasoning, and comprehension.

Executive Control Processes

Cognitive functions that manage and regulate the coordination of thoughts and behaviors, including planning and decision making.

Working Memory Capacity

The maximum amount of information that can be held and manipulated within the working memory for a short period.