The diagram below shows the short- run cost curves for 3 perfectly competitive firms in the same industry. FIGURE 9- 6
-Refer to Figure 9- 6. Which of the following statements about Firms A, B and C is true?
A) Firm A is earning profits, Firm B is breaking even, and Firm C is suffering losses.
B) Firms A, B and C are earning profits.
C) Firm A is breaking even, Firm B is suffering losses, and Firm C is earning profits.
D) Firm A is suffering losses, Firm B is breaking even, and Firm C is earning profits.
E) Firms A, B and C are breaking even.

Question

The diagram below shows the short- run cost curves for 3 perfectly competitive firms in the same industry.  FIGURE 9- 6
-Refer to Figure 9- 6. Which of the following statements about Firms A, B and C is true?
A) Firm A is earning profits, Firm B is breaking even, and Firm C is suffering losses. 
B) Firms A, B and C are earning profits. 
C) Firm A is breaking even, Firm B is suffering losses, and Firm C is earning profits. 
D) Firm A is suffering losses, Firm B is breaking even, and Firm C is earning profits. 
E) Firms A, B and C are breaking even.

Quizplus · Accepted Answer

The statement indicates that Firm A is earning profits, Firm B is breaking even, and Firm C is suffering losses, which is a typical scenario depicted in economic graphs where firms are compared based on their cost and revenue structures.

The Diagram Below Shows the Short- Run Cost Curves for 3