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58) Refer to the attached Figure 17. When price rises from P2 to P3, what does the firm find?  A. Marginal cost exceeds marginal revenue at a production level of Q2.  B. Expanding output to Q3 would leave the firm with losses.  C. If it produces at output level Q3 it will earn a zero profit.  D. If it produces at output level Q3 it will earn a positive profit.

58) Refer to the attached Figure 17. When price rises from P2 to P3, what does the firm find?  A. Marginal cost exceeds marginal revenue at a production level of Q2.  B. Expanding output to Q3 would leave the firm with losses.  C. If it produces at output level Q3 it will earn a zero profit.  D. If it produces at output level Q3 it will earn a positive profit.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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58) Refer to the attached Figure 17. When price rises from P2 to P3, what does the firm find?

  •  A. Marginal cost exceeds marginal revenue at a production level of Q2.
  •  B. Expanding output to Q3 would leave the firm with losses.
  •  C. If it produces at output level Q3 it will earn a zero profit.
  •  D. If it produces at output level Q3 it will earn a positive profit.

57) What will happen when new firms enter a perfectly competitive market?

  •  A. Profits of existing firms will fall.
  •  B. Existing firms will see their costs rise.
  •  C. Consumers will likely observe increasing prices.
  •  D. Entering firms will earn zero profit as soon as they enter.

 

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Transcribed Image Text:Price ATC MC P. AVC P3 P2 P1 Quantity
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