**Question:**Which point or points are included in the firm's supply curve in the short run?- [ ] A- [ ] None of these points are on the firm's short-run supply curve.- [ ] C- [ ] D- [ ] B**Diagram Explanation:**The diagram, partially visible on the right, appears to show cost curves typically used in microeconomics to illustrate a firm's cost structures and supply decisions. Here’s a general description:- The graph likely includes curves such as the Marginal Cost (MC), Average Total Cost (ATC), and Average Variable Cost (AVC).- The x-axis might be labeled as Quantity and the y-axis as Cost/Price.- The firm’s supply curve in the short run is usually represented by the portion of the MC curve above the AVC curve.- Points labeled A, B, C, and D might be plotted on or around these curves, indicating different cost and output combinations.The correct determination of which point(s) belong to the firm's short-run supply curve would ideally involve identifying the segment of the Marginal Cost curve that lies above the Average Variable Cost curve. The graph illustrates the cost curves of an individual firm in a perfectly competitive industry, focusing on profit-maximizing output decisions. Key points are outlined as follows:1. **Point A:** Represents the shutdown decision point. This occurs where the price is equal to the minimum average variable cost (AVC). In this graph, it's around the intersection of the Average Variable Cost curve with the Marginal Cost curve at the lowest point of the AVC curve.2. **Point B:** Indicates where the firm is making a loss but will continue operating in the short run. This is typically at any point where the price is between the AVC and the Average Total Cost (ATC) curves. Here, it follows the Marginal Cost curve above the AVC but still below the ATC.3. **Point C:** The break-even point, where the firm makes no economic profit or loss, is at the intersection of the Marginal Cost and Average Total Cost curves. At this point, the price equals the ATC.4. **Point D:** Reflects the point where the firm is making an economic profit. This is where the price is above the ATC, along the Marginal Cost curve. **Graph Details:**- The **vertical axis** represents the price, ranging from 0 to 21.- The **horizontal axis** indicates the quantity, ranging from 0 to 42.- The **Marginal Cost (MC) curve** is upward sloping.- The **Average Total Cost (ATC) curve** is U-shaped and positioned above the AVC curve.- The **Average Variable Cost (AVC) curve** is also U-shaped but lies below the ATC.These curves help in determining the optimal production levels for different pricing scenarios in perfectly competitive markets.

Answered: Image /qna-images/answer/6de3b6a0-616d-4213-98f9-a70445608f00.jpgHence the points A , B , C and D have been placed on the given graph.

Business

Economics

The graph shows the cost curves of an individual firm in a perfectly (or purely) competitive industry. Use the points A, B, C, and D to trace out the firm's profit-maximing output decisions, according to the instructions. Place point A at the shutdown decision point. Place point B at the point where the firm is making a loss but will continue to operate in the short run. Place point C at the break-even point. Place point D at the point where the firm is making an economic profit.

The graph shows the cost curves of an individual firm in a perfectly (or purely) competitive industry. Use the points A, B, C, and D to trace out the firm's profit-maximing output decisions, according to the instructions. Place point A at the shutdown decision point. Place point B at the point where the firm is making a loss but will continue to operate in the short run. Place point C at the break-even point. Place point D at the point where the firm is making an economic profit.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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