Figure 13-14 Illustrates a Monopolistically Competitive Firm

Multiple Choice

Figure 13-14 illustrates a monopolistically competitive firm.
-Refer to Figure 13-14.It is possible to lower the average cost of production by expanding output beyond Q0 to Q1.Why wouldn't a firm expand its output to Q1?

A) The firm wants to maximize accounting profit rather than economic profit.
B) The firm would suffer an economic loss at Q1 while it would break even at Q0.
C) The firm's marginal revenue would be negative at Q1.
D) Demand is not sufficient for consumers to buy Q1.