Use the following to answer questions:
Figure: Comparing Long-Run Equilibriums
-(Figure: Comparing Long-Run Equilibriums) In the figure Comparing Long-Run Equilibriums, which of the following statements is FALSE?
A) The firm in panel (a) produces where price equals marginal cost and average total cost.
B) The firm in panel (b) produces where price equals marginal cost.
C) The firm in panel (b) produces where price equals average cost.
D) The firm in panel (a) produces where price equals average cost.

Question

Use the following to answer questions:
Figure: Comparing Long-Run Equilibriums 
-(Figure: Comparing Long-Run Equilibriums) In the figure Comparing Long-Run Equilibriums, which of the following statements is FALSE?
A) The firm in panel (a) produces where price equals marginal cost and average total cost. 
B) The firm in panel (b) produces where price equals marginal cost. 
C) The firm in panel (b) produces where price equals average cost. 
D) The firm in panel (a) produces where price equals average cost.

Quizplus · Accepted Answer

In long-run equilibrium, a firm produces where price equals marginal cost and average total cost. However, the statement in option B is false because it suggests that the firm in panel (b) produces where price equals marginal cost, which may not necessarily be true in the context of the figure.

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