The Following Figure Shows Equilibrium at the Industry and Firm

question 5

Multiple Choice

The following figure shows equilibrium at the industry and firm level. Figure 23.6 In the figure,
S₁, S₂, S₃ are the market supply curves.
D₁ and D₂ are the market demand curves.
MC is the marginal cost curve of the firm.
MR₁ and MR₂ are the marginal revenue curves of the firm.
ATC is the average-total-cost curve of the firm.
According to Figure 23.6, if the market price was $1.50, the individual firm would:

• A)be earning a negative economic profit of about $5.
• B)be earning a positive economic profit of about $5.
• C)be earning a positive economic profit of about $0.87.
• D)be earning a negative economic profit of about $4.50.
• E)be earning a positive economic profit of about $0.50.

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