Refer to the diagram to the right. In the long run, why will the firm produce Q, units and not Qg units, which has a lower its average cost of production? OA. Although its average cost of production is lower when the firm produces Qunits, to be able to sell its output the firm will have to charge a price below average cost, resulting in a loss. B. The firm's goal is to charge a high price and make a small profit rather than a low price and no profit. OC. At Qg, average cost exceeds marginal cost so the firm will actually make a loss. Op. At Qg, marginal revenue t is less than average revenue cost which will result in a loss for the firm. Price and cost per unit ($) MR Q₁ QgQhQj Quantity MC ATC D

Refer to the diagram to the right. In the long run, why will the firm produce Q, units and not Qg units, which has a lower its average cost of production? OA. Although its average cost of production is lower when the firm produces Qunits, to be able to sell its output the firm will have to charge a price below average cost, resulting in a loss. B. The firm's goal is to charge a high price and make a small profit rather than a low price and no profit. OC. At Qg, average cost exceeds marginal cost so the firm will actually make a loss. Op. At Qg, marginal revenue t is less than average revenue cost which will result in a loss for the firm. Price and cost per unit ($) MR Q₁ QgQhQj Quantity MC ATC D

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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What is the firms profit or loss?
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