The Figure Given Below Shows the Revenue and Cost Curves

question 45

Multiple Choice

The figure given below shows the revenue and cost curves of a perfectly competitive firm. Figure 9.5 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 9.5 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.

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Definitions:

William James

An American philosopher and psychologist, often referred to as the "Father of American psychology," known for his work in pragmatism and functionalism.

Psychology

The scientific study of the mind and behavior, encompassing various aspects of conscious and unconscious experience as well as thought and brain functions.

Wilhelm Wundt

A German psychologist who is considered the father of experimental psychology; he established the first psychology laboratory.

Research Method

Systematic procedures or strategies used by scientists and scholars to gather, analyze, and interpret data in order to draw conclusions or solve problems.