Refer to the above figure. If the market price is equal to A, which statement can be made about profits?
A) Profits are positive and equal to BCEA.
B) Profits are positive and equal to BCFG.
C) Profits are negative and equal to BCEA.
D) Profits are negative and equal to GFQ 0.
C
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International trade shocks
A. are of greater concern to large industrialized countries than to developing countries that rely on exporting a few primary commodities. B. can be avoided by moderate use of tariffs and non-tariff barriers. C. include changes in a country's total exports that result from changes in foreign consumer tastes. D. have no impact on the countries under fixed exchange-rate regimes.
In a perfectly competitive market, if supply and demand fully reflect all of the costs and benefits associated with production and consumption, then total economic surplus is maximized when:
A. consumer surplus and producer surplus are equal. B. price controls keep prices low enough that most consumers can purchase the item. C. consumer surplus is greater than producer surplus. D. the market is in equilibrium.