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If a Firm in a Perfectly Competitive Market Faces the Cost

Question 85

Multiple Choice

If a firm in a perfectly competitive market faces the cost curves in the graph shown and observes a market price of $10,the firm: A) can make positive profits by producing more than 43 units. B) can make positive profits by producing where MC = MR. C) cannot make positive profits and should shut down in the short run. D) should continue to operate in the short run, but plan to exit in the long run. If a firm in a perfectly competitive market faces the cost curves in the graph shown and observes a market price of $10,the firm:


A) can make positive profits by producing more than 43 units.
B) can make positive profits by producing where MC = MR.
C) cannot make positive profits and should shut down in the short run.
D) should continue to operate in the short run, but plan to exit in the long run.

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