At the optimal production point, the firm in Figure 7.3 will:
A. make a zero economic profit.
B. suffer a loss.
C. make a positive economic profit.
D. break even.
Answer: C
Economics
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Assuming Cournot behavior, what happens to the market output, the price of the output, and each firm's output as the number of firms in a market increases?
What will be an ideal response?
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Suppose that Firm A cheats, and B does not. What is A's payoff from cheating?
a. 0 b. 50 c. -10 d. 25
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