Figure 13-17

-Refer to Figure 13-17.Suppose the firm is currently producing Qf units.What happens if it increases its output to Qg units?
A)Its average cost of production will fall and its profit will rise.
B)It will be taking advantage of economies of scale and will be able to lower the price of its product.
C)It will move from a zero profit situation to a profit situation.
D)It will move from a zero profit situation to a loss situation.

Question

Figure 13-17
 
-Refer to Figure 13-17.Suppose the firm is currently producing Qf units.What happens if it increases its output to Qg units?
A)Its average cost of production will fall and its profit will rise. 
B)It will be taking advantage of economies of scale and will be able to lower the price of its product. 
C)It will move from a zero profit situation to a profit situation. 
D)It will move from a zero profit situation to a loss situation.

Quizplus · Accepted Answer

If the firm increases its output from Qf to Qg, it will move from a zero profit situation to a loss situation, as indicated by the cost and revenue curves in Figure 13-17.

Figure 13-17 -Refer to Figure 13-17.Suppose the Firm Is Currently Producing Qf