The diagram below represents the cost and revenue situation of a firm. Use the information in the diagram to answer the questions that follow. (a) Why would...
Question 1 Report
The diagram below represents the cost and revenue situation of a firm. Use the information in the diagram to
answer the questions that follow.
(a) Why would the firm not produce at (i) Q\(\_1\) (ii) Q\(\_3\) ? [6 marks]
(b) How much profit does the firm make at P\(\_1\)? [4 marks]
(c) If price falls to P\(\_1\)
(i) What quantity would the firm produce? [2 marks]
(ii) What type of profit does the firm make? [2 marks]
(iii) Explain your answer in c(ii). [4 marks]
(d) In which type of market s the firm operating?[2 marks]