Use the figure below to answer the following questions.

Figure 12.3.3
-Refer to Figure 12.3.3 which shows the cost curves and marginal revenue curve of a firm in a perfectly competitive industry.The firm is

Question

Use the figure below to answer the following questions.
  
Figure 12.3.3
-Refer to Figure 12.3.3 which shows the cost curves and marginal revenue curve of a firm in a perfectly competitive industry.The firm is

Quizplus · Accepted Answer

The firm is producing where marginal cost (MC) equals marginal revenue (MR), which is at the intersection of the MC and MR curves. At this point, the firm is producing Q units of output and charging a price P. However, P is below the average total cost (ATC) curve, indicating that the firm is incurring an economic loss. Therefore, the best choice is B, which indicates that the firm is incurring an economic loss.

Use the Figure Below to Answer the Following Questions