Multiple Choice
Figure 7.4 
Figure 7.4 shows the cost and demand curves for a profit-maximising firm in a perfectly competitive market.
-Refer to Figure 7.4.If the market price is $30,should the firm represented in the diagram continue to stay in business?
A) No, it should shut down because it is incurring a loss.
B) No, it should shut down because it cannot cover its variable cost.
C) Yes, because it is covering part of its fixed cost.
D) Yes, because it is making a profit.
Correct Answer:
Verified
Correct Answer:
Verified
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