Figure 13-14 Figure 13-14 Illustrates a Monopolistically Competitive Firm

Multiple Choice

Figure 13-14 Figure 13-14 illustrates a monopolistically competitive firm.
-Refer to Figure 13-14. Which of the following statements describes the firm depicted in the diagram?

A) The firm is making no economic profit and will exit the industry.
B) The firm is suffering an economic loss by producing at Q₀ but will break even if it increases its output to Q₁.
C) The firm achieves productive efficiency by producing at Q₀.
D) The firm is in long-run equilibrium and is breaking even.