Figure 14-4 Suppose a Firm Operating in a Competitive Market Has the Has

Multiple Choice

Figure 14-4
Suppose a firm operating in a competitive market has the following cost curves:
-Refer to Figure 14-4. When price rises from P3 to P4, the firm finds that

A) fixed costs decrease as output increases from Q3 to Q4.
B) it can earn a positive profit by increasing production to Q4.
C) profit is still maximized at a production level of Q3.
D) average revenue exceeds marginal revenue at a production level of Q4.