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The Graph Below Depicts the Cost Structure for a Firm

Question 154

Multiple Choice

The graph below depicts the cost structure for a firm in a competitive market.
Figure 9-13
The graph below depicts the cost structure for a firm in a competitive market. Figure 9-13 Refer to Figure 9-13. When price falls from P<sub>3</sub> to P<sub>1</sub>, the firm finds that A) fixed cost is higher at a production level of Q<sub>1</sub> than it is at Q<sub>3</sub>. B) it should produce Q<sub>1</sub> units of output. C) it should produce Q<sub>3</sub> units of output. D) it should shut down immediately.
Refer to Figure 9-13. When price falls from P3 to P1, the firm finds that


A) fixed cost is higher at a production level of Q1 than it is at Q3.
B) it should produce Q1 units of output.
C) it should produce Q3 units of output.
D) it should shut down immediately.

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