Multiple Choice
Figure 14-2
-Refer to Figure 14-2.Which statement best reflects the situation faced by the firm when price falls from P4 to P₂
A) The firm will suffer a loss equal to (P4 - P₂) × Q₂.
B) The firm will earn profit equal to (P4 - P₂) × Q₂.
C) Marginal revenue is now lower than marginal cost at the previous level of output (Q₄) , so it decreases production.
D) Marginal revenue is now higher than marginal cost at the previous level of output (Q₄) , so it increases production.
Correct Answer:
Verified
Related Questions
Q50: As a general rule,what do we know
Q51: Table 14-3 Q52: Figure 14-1 Q53: Figure 14-1 Q54: When marginal revenue for a firm equals
