The Following Figures Show the Demand and Cost Curves of a Perfectly

Multiple Choice

The following figures show the demand and cost curves of a perfectly competitive and a monopoly firm respectively. Figure 10.7
D: Average Revenue
AC: Average cost
MC: Marginal cost
MR: Marginal cost
-According to Figure 10.7,which of the following statements is incorrect about the price P₁?

A) The monopolist is maximizing profit at P_1.
B) In the long run,firms will leave the perfectly competitive industry and force the price upward.
C) The monopolist is earning normal profit at P_1.
D) Both the firms maximize their profits at P_{1 .}
E) The perfectly competitive firm would produce 10 units of output at P_1.