Figure 10.9
-Refer to Figure 10.9.The graph in the figure that depicts a monopolistically competitive firm that is minimising its losses is
A)Panel A
B)Panel B
C)Panel C
D)Panel A and Panel C

Question

Figure 10.9 
-Refer to Figure 10.9.The graph in the figure that depicts a monopolistically competitive firm that is minimising its losses is
A)Panel A 
B)Panel B 
C)Panel C 
D)Panel A and Panel C

Quizplus · Accepted Answer

Panel C shows the monopolistically competitive firm minimizing its losses by producing a quantity where marginal revenue equals marginal cost (MR=MC) and charging a price where this quantity intersects with the demand curve. At this point, the firm is still making negative economic profit but is minimizing its losses. Panels A and B show the firm making positive economic profit, so they cannot be the correct choice. Panel D is not a valid choice as it includes two panels that are not directly related to the question being asked.

Figure 10.9 -Refer to Figure 10.9.The Graph in the Figure That Depicts