Figure 13-17 -Refer to Figure 13-17. In the long run, why will the firm produce Q_f units and not Q_gunits, which has a lower its average cost of production? A) Although its average cost of production is lower when the firm produces Q_gunits, to be able to sell its output the firm will have to charge a price below average cost, resulting in a loss. B) At Q_g, average cost exceeds marginal cost so the firm will actually make a loss. C) At Q_g, marginal revenue is less than average revenue which will result in a loss for the firm. D) The firm's goal is to charge a high price and make a small profit rather than a low price and no profit.

Question

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In the long run, the firm will produce Q_f units because producing Q_g units would require selling at a price below average cost, leading to a loss.

Figure 13-17 -Refer to Figure 13-17. in the Long Run, Why Will