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Figure 12-7 Figure 12-7 Illustrates the Cost Curves of a Perfectly

Question 130

Multiple Choice

Figure 12-7 Figure 12-7 Figure 12-7 illustrates the cost curves of a perfectly competitive firm. -Refer to Figure 12-7. If the market price is P<sub>3</sub> the firm A) will break even. B) will make a profit. C) will earn enough revenue to cover its variable costs but not its fixed costs. D) will produce a quantity of Q<sub>1</sub>. Figure 12-7 illustrates the cost curves of a perfectly competitive firm.
-Refer to Figure 12-7. If the market price is P₃ the firm

A) will break even.
B) will make a profit.
C) will earn enough revenue to cover its variable costs but not its fixed costs.
D) will produce a quantity of Q₁.

Correct Answer: