If a 5 percent increase in price causes a 10 percent increase in quantity supplied, then supply is

The largest loss a profit-maximizing perfectly competitive firm can incur in the short run equals its

A) average variable cost multiplied by output. B) total fixed cost. C) marginal cost multiplied by the number of units produced. D) average total cost multiplied by the number of units produced. E) total variable cost.

Refer to the above figure. The market equilibrium quantity is Q1. Point Q2 represents the optimal amount of production. The government can achieve the optimal outcome by

A) setting the price at P3. B) providing a per-unit subsidy to consumers equal to P3 - P1. C) providing a per-unit subsidy to consumers equal to P2 - P1. D) establishing a tax equal to P2 - P1 per unit of the good sold.