These are the cost and revenue curves associated with a firm. If the firm in the graph were producing Q2 and charging P2,it:

Question

These are the cost and revenue curves associated with a firm.  If the firm in the graph were producing Q2 and charging P2,it:

Quizplus · Accepted Answer

- Option A is true since in perfect competition, the firm produces where marginal cost (MC) equals marginal revenue (MR), which is at point Q2 in the graph.
- Option B is true because producing at Q2 ensures that the firm is producing at the minimum point on the average total cost (ATC) curve, i.e., ATC = P2.
- Option C is true because producing at Q2 and charging P2 results in zero deadweight loss, as the price charged is equal to the marginal cost of production. Therefore, all trades that benefit both the buyer and the seller are being made.

These Are the Cost and Revenue Curves Associated with a Firm