Figure 14-5
Suppose a firm operating in a competitive market has the following cost curves:
-Refer to Figure 14-5. When market price is P2, a profit-maximizing firm's losses can be represented by the area
A)(P4 - P2) × Q2.
B)(P2 - P1) × (Q2-Q1).
C)At a market price of P2, the firm earns profits, not losses.
D)At a market price of P2 the firm has losses, but the reference points in the figure don't identify the losses.

Question

Figure 14-5
Suppose a firm operating in a competitive market has the following cost curves: 
-Refer to Figure 14-5. When market price is P2, a profit-maximizing firm's losses can be represented by the area
A)(P4 - P2) × Q2. 
B)(P2 - P1) × (Q2-Q1). 
C)At a market price of P2, the firm earns profits, not losses. 
D)At a market price of P2 the firm has losses, but the reference points in the figure don't identify the losses.

Quizplus · Accepted Answer

The Answer of Figure 14-5
Suppose a firm operating in a competitive market has the following cost curves: 
-Refer to Figure 14-5. When market price is P2, a profit-maximizing firm's losses can be represented by the area
A)(P4 - P2) × Q2. 
B)(P2 - P1) × (Q2-Q1). 
C)At a market price of P2, the firm earns profits, not losses. 
D)At a market price of P2 the firm has losses, but the reference points in the figure don't identify the losses.

Figure 14-5 Suppose a Firm Operating in a Competitive Market Has the Has