3. The graph on the right shows the short-run cost curves and threepossible marginal revenue curves for a perfectly competitive firm.If the firm were facing MR₁, then we know that this firmshouldOA. keep producing, even though it isincurring a loss it is less than the fixedcosts that must be paid if it shuts down.OB. keep producing, since it is making aprofit at the profit-maximizing output.OC. shut down, since it is incurring a lossthat is greater than the fixed costs thatmust be paid if it shuts down.OD. shut down, since it is incurring a lossand when a firm earns less thanzero profit, it should shut down.If the firm were facing MR₂, then we know that this firmshouldOA shut down, since it is incurring a lossand when a firm ears less thanzero profit, it should shut down.OB. keep producing, even though it isincurring a loss it is less than the fixedcosts that must be paid if it shuts down.OC. keep producing, since it is making aprofit at the profit-maximizing outputOD. shut down, since it is incurring a lossthat is greater than the fixed costs thatmust be paid if it shuts down.the fem oro facing UPQuantityMCATCAVCMR₁MR₂MR₁OD. shut down, since it is incurring a loss.and when a firm earns less thanzero profit, it should shut down.If the firm were facing MR₂, then we know that this firmshouldA. shut down, since it is incurring a loss.and when a firm earns less thanzero profit, it should shut down..OB. keep producing, even though it isincurring a loss it is less than the fixed.costs that must be paid if it shuts downOC. keep producing, since it is making aprofit at the profit-maximizing outputD.shut down, since it is incurring a lossthat is greater than the fixed costs thatmust be paid if it shuts downIf the firm were facing MR, then we know that this firmshouldOA. shut down, since it is incurring a lossthat is greater than the fixed costs thatmust be paid if it shuts downOB. keep producing, since it is making aprofit at the profit-maximizing output.OC. shut down, since it is incurring a lossand when a firm earns less thanzero profit, it should shut down.D. keep producing, even though it isincurring a loss it is less than the fixedcosts that must be paid if it shuts downQuantity4wir

The profit-maximization level is the output level at which a business can achieve maximum profit. It…

3. The graph on the right shows the short-run cost curves and three possible marginal revenue curves for a perfectly competitive firm If the firm were facing MR,, then we know that this firm should OA keep producing, even though it is incurring a loss it is less than the fixed costs that must be paid if it shuts down. OB. keep producing, since it is making a profit at the profit-maximizing output. OC. shut down, since it is incurring a loss that is greater than the fixed costs that must be paid if it shuts down OD. shut down, since it is incuring a loss and when a firm earns less than zero profit, it should shut down If the firm were facing MR, then we know that this firm should - OA shut down, since it is incurring a loss and when a firm eams less than zero profit, it should shut down. OB. keep producing, even though it is incurring a loss it is less than the fixed costs that must be paid if it shuts down OC. keep producing, since it is making a profit at the proft-maximizing output OD. shut down, since it is incurring a loss that is greater than the fixed costs that must be paid if it shuts down Quantity ATC AVC MR₁ MR₂ MR₂ OD. shut down, since it is incurring a loss and when a firm earns less than zero profit, it should shut down. If the firm were facing MR,, then we know that this firm should OA. shut down, since it is incurring a loss and when a firm earns less than zero profit, it should shut down. OB. keep producing, even though it is incurring a loas it is less than the fixed costs that must be paid if it shuts down OC. keep producing, since it is making a profit at the profit-maximizing output D. shut down, since it is incurring a loss that is greater than the found costs that must be paid if it shuts down If the firm were facing MR, then we know that this firm should OA. shut down, since it is incurring a loss that is greater than the fixed costs that must be paid if it shuts down OB. keep producing, since it is making a profit at the profit-maximizing output OC. shut down, since it is incurring a loss and when a firm earns less than zero profit, it should shut down OD. keep producing, even though it is incurring a loss it is less than the fixed costs that must be paid if it shuts down Quantity A tweng