Figure 10.17 -Refer to Figure 10.17.Suppose the firm is currently producing Q_f units.What happens if it increases its output to Q_gunits? 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

Quizplus · Accepted Answer

Without seeing Figure 10.17, we can infer from the question that increasing output leads to a situation where the firm moves from a zero profit situation to a loss situation. This implies that the additional units produced increase costs more than revenues, leading to losses.

Figure 10.17 -Refer to Figure 10.17.Suppose the Firm Is Currently Producing Qf

Figure 10.17 -Refer to Figure 10.17.Suppose the Firm Is Currently Producing Q_f