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

Multiple Choice

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 P₂, a profit-maximizing firm's losses can be represented by the area

A) (P₄ − P₂) × Q₂.
B) (P₂ − P₁) × (Q₂ − Q₁) .
C) At a market price of P₂, the firm earns profits, not losses.
D) At a market price of P₂ the firm has losses, but the reference points in the figure don't identify the losses.