The Figure Given Below Shows the Revenue and Cost Curves

question 100

Multiple Choice

The figure given below shows the revenue and cost curves of a perfectly competitive firm. Figure 23.5 MC: Marginal cost curve
MR: Marginal revenue curve.
ATC: Average-total-cost curve
AVC: Average-variable-cost curve
Assume the price facing the firm in Figure 23.5 is P_1.Which of the following statements is true?

• A)Total revenue for the firm is area 0BDQ₁.
• B)The firm should produce Q₂.
• C)Total cost for the firm is area 0P₁EQ₁.
• D)The firm's total revenue is more than sufficient to cover its variable costs, so it should remain in operation.
• E)The firm should shut down because price per unit received is less than average total cost.

Distinguish the long-term average returns on equity investments relative to other investments and inflation.

Recognize the concept and significance of diversification in investment portfolios.

Define risk in investment and understand its measurement.

Learn the basics of portfolio theory and its implications on investment decisions.

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