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Figure 14-3 Suppose a Firm Operating in a Competitive Market Has the Has

Question 135

Multiple Choice

Figure 14-3
Suppose a firm operating in a competitive market has the following cost curves: Figure 14-3 Suppose a firm operating in a competitive market has the following cost curves: -Refer to Figure 14-3. When market price is P<sub>7</sub>, a profit-maximizing firm's short-run profits can be represented by the area A) P<sub>7</sub> × Q<sub>5</sub>. B) P<sub>7</sub> × Q<sub>3</sub>. C) (P<sub>7</sub> − P<sub>5</sub>) × Q<sub>3</sub>. D) We are unable to determine the firm's profits because the quantity that the firm would produce is not labeled on the graph.
-Refer to Figure 14-3. When market price is P7, a profit-maximizing firm's short-run profits can be represented by the area


A) P7 × Q5.
B) P7 × Q3.
C) (P7 − P5) × Q3.
D) We are unable to determine the firm's profits because the quantity that the firm would produce is not labeled on the graph.

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