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Figure 11-4 Figure 11-4 Shows Short-Run Cost and Demand Curves

Question 95

Multiple Choice

Figure 11-4
Figure 11-4 Figure 11-4 shows short-run cost and demand curves for a monopolistically competitive firm in the market for designer watches. -Refer to Figure 11-4.Should the firm represented in the diagram continue to stay in business despite its losses? A) No, it should shut down. B) Yes, its total revenue covers its variable cost. C) No, it is not able to cover its fixed cost. D) Yes, it should increase its revenue by raising its price. Figure 11-4 shows short-run cost and demand curves for a monopolistically competitive firm in the market for designer watches.
-Refer to Figure 11-4.Should the firm represented in the diagram continue to stay in business despite its losses?


A) No, it should shut down.
B) Yes, its total revenue covers its variable cost.
C) No, it is not able to cover its fixed cost.
D) Yes, it should increase its revenue by raising its price.

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