Use the following figure to answer the question : Figure 9-3 : shows the marginal cost curve,average total cost curve,average variable cost curve,and marginal revenue curve for a firm for different levels of output.
-Refer to Figure 9-3.At the profit-maximizing level of output:
A)the firm is earning economic profit.
B)profits per unit are the highest.
C)profit equals ZC.
D)costs exceed revenue.

Question

Use the following figure to answer the question : Figure 9-3 : shows the marginal cost curve,average total cost curve,average variable cost curve,and marginal revenue curve for a firm for different levels of output. 
-Refer to Figure 9-3.At the profit-maximizing level of output:
A)the firm is earning economic profit. 
B)profits per unit are the highest. 
C)profit equals ZC. 
D)costs exceed revenue.

Quizplus · Accepted Answer

At the profit-maximizing level of output, the firm is earning economic profit because it is producing where marginal cost equals marginal revenue, which typically results in positive economic profit if price exceeds average total cost.

Use the Following Figure to Answer the Question : Figure