Exhibit 22-4 ​

Exhibit 22-4
​

-Refer to Exhibit 22-4. The market equilibrium price is P₁ and the firm produces Q₁. At this level of output, average variable cost and average total cost are indicated by the dots. Given this situation, the firm is

A) receiving a profit equal to area 3.
B) taking a loss equal to area 2 + area 3.
C) earning total revenue equal to area 1 + area 2.
D) receiving a profit equal to area 2.
E) none of the above