Use the following figure to answer the question : Figure 9-2 : shows the total cost and total revenue curves for a firm.

-Refer to Figure 9-2.At which of the following output levels is the firm incurring its highest loss?
A)1 unit
B)2 units
C)3 units
D)4 units

Question

Use the following figure to answer the question : Figure 9-2 : shows the total cost and total revenue curves for a firm.

-Refer to Figure 9-2.At which of the following output levels is the firm incurring its highest loss?
A)1 unit 
B)2 units 
C)3 units 
D)4 units

Quizplus · Accepted Answer

At 1 unit of output, the firm's loss is highest because it is the difference between the total cost and total revenue, which is greatest at the lowest level of production since fixed costs are spread over fewer units, increasing the loss per unit.

Use the Following Figure to Answer the Question : Figure