Figure 13-10
-Refer to Figure 13-10.Suppose the firm is currently producing Qf units.What happens if it increases its output to Qg units?
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

Figure 13-10 
-Refer to Figure 13-10.Suppose the firm is currently producing Qf units.What happens if it increases its output to Qg units?
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

Quizplus · Accepted Answer

If the firm increases its output from Qf to Qg, it will move from a zero profit situation to a loss situation, as the additional units will likely be produced at a higher cost than the revenue they generate.

Figure 13-10 -Refer to Figure 13-10.Suppose the Firm Is Currently Producing Qf