Figure 13-17 -Refer to Figure 13-17. in the Long Run, Why Will

Multiple Choice

Figure 13-17
-Refer to Figure 13-17. In the long run, why will the firm produce Q_f units and not Q_g units, which has a lower its average cost of production?

A) Although its average cost of production is lower when the firm produces Q_g units, to be able to sell its output the firm will have to charge a price below average cost, resulting in a loss.
B) At Q_g, average cost exceeds marginal cost so the firm will actually make a loss.
C) At Q_g, marginal revenue is less than average revenue which will result in a loss for the firm.
D) The firm's goal is to charge a high price and make a small profit rather than a low price and no profit.