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-(Figure: The Profit-Maximizing Firm in the Short Run) Use Figure: The Profit-Maximizing Firm in the Short Run.If the market price is P₃,the firm will produce quantity _____ and _____ in the short run.

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-(Figure: The Profit-Maximizing Firm in the Short Run) Use Figure: The Profit-Maximizing Firm in the Short Run.If the market price is P₃,the firm will produce quantity _____ and _____ in the short run.

Quizplus · Accepted Answer

At P₃, the firm will produce q₂, which is where the MC=MR. However, at this quantity, the market price is below the average total cost (ATC) curve. This means that the firm is not covering all of its costs and will incur a loss. Therefore, choice C is the correct answer.

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