Figure 10-3

-In Figure 10-3, the perfectly competitive firm is realizing a

Question

Figure 10-3
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-In Figure 10-3, the perfectly competitive firm is realizing a

Quizplus · Accepted Answer

The firm is producing at the point where marginal cost equals marginal revenue (MC=MR) and the price is P, indicating that the firm is maximizing profit. At this output level, the total revenue is represented by ABDF while the total cost is represented by ADEF. Therefore, the profit is ABDF-ADEF=ABCF, which is positive and equal to ABDF. Therefore, the correct choice is C.

Figure 10-3 ​

Figure 10-3