The Above Graph Shows the Demand and Cost Conditions Facing

question 99

Multiple Choice

The above graph shows the demand and cost conditions facing a price-setting firm. The firm will produce _____ units of output and charge a price of _____.

• A)40,$8
• B)50,$9
• C)60,$10
• D)50,$6
• E)none of the above

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Definitions:

Economies Of Scale

The cost advantage that arises with increased output of a product, where the average cost per unit falls as the volume of its production increases.

Opportunity Cost

The next best alternative foregone as a result of making a decision.

Rice

A staple food grain consumed by a large portion of the world's population, particularly in Asia.

Resource Endowments

The natural resources, labor force, and capital that a country possesses, which can affect its economic development.