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Figure 12-13 -Refer to Figure 12-13. Suppose the Prevailing Price Is P1

Question 220

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Figure 12-13 Figure 12-13 -Refer to Figure 12-13. Suppose the prevailing price is P<sub>1</sub> and the firm is currently producing its loss-minimizing quantity. If the firm represented in the diagram continues to stay in business, in the long-run equilibrium A) it will reduce its output to Q<sub>0</sub> and face a price of P<sub>0</sub>. B) it will continue to produce Q<sub>1</sub> but faces the higher price of P<sub>2</sub>. C) it will expand its output to Q<sub>2</sub> and face a price of P<sub>2</sub>. D) it will expand its output to Q<sub>3</sub> and face a price of P<sub>1</sub>.
-Refer to Figure 12-13. Suppose the prevailing price is P1 and the firm is currently producing its loss-minimizing quantity. If the firm represented in the diagram continues to stay in business, in the long-run equilibrium


A) it will reduce its output to Q0 and face a price of P0.
B) it will continue to produce Q1 but faces the higher price of P2.
C) it will expand its output to Q2 and face a price of P2.
D) it will expand its output to Q3 and face a price of P1.

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