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The Graph Below Depicts the Cost Structure for a Firm

Question 89

Multiple Choice

The graph below depicts the cost structure for a firm in a competitive market.
Figure 9-13 The graph below depicts the cost structure for a firm in a competitive market. Figure 9-13 -Refer to Figure 9-13. When price rises from P<sub>3</sub> to P<sub>4</sub>, the firm finds that A) fixed costs are lower at a production level of Q<sub>4</sub>. B) it can earn a positive profit by increasing production to Q<sub>4</sub>. C) profit is still maximized at a production level of Q<sub>3</sub>. D) average revenue exceeds marginal revenue at a production level of Q<sub>4</sub>.
-Refer to Figure 9-13. When price rises from P3 to P4, the firm finds that


A) fixed costs are lower at a production level of Q4.
B) it can earn a positive profit by increasing production to Q4.
C) profit is still maximized at a production level of Q3.
D) average revenue exceeds marginal revenue at a production level of Q4.

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