Consider the following short-run cost curves for a profit-maximizing firm in a perfectly competitive industry. FIGURE 9-2
-Refer to Figure 9-2.If the market price is $1,the firm will produce ________ units of output in the short run.
A)0
B)100
C)200
D)300
E)400

Question

Consider the following short-run cost curves for a profit-maximizing firm in a perfectly competitive industry.  FIGURE 9-2
-Refer to Figure 9-2.If the market price is $1,the firm will produce ________ units of output in the short run.
A)0 
B)100 
C)200 
D)300 
E)400

Quizplus · Accepted Answer

If the market price is $1 and it is below the firm's average variable cost, the firm will not produce any output in the short run to minimize losses, hence producing 0 units.

Consider the Following Short-Run Cost Curves for a Profit-Maximizing Firm