Part IV: AP Macroeconomics & Microeconomics Tests
- Question 6 refers to the following graph.
The graph above shows the cost curves of a firm in a perfectly competitive market. Which of the following
statements is false?
A. The firm is earning negative economic profits when its output is 325 units.
B. The firm should shut down when its total profit is $1,250.
C. The firm’s profit maximizing output is 350 units.
D. The firm’s profit maximizing price is $15 a unit.
E. The firm’s maximum profit is $7,000.250 300 325 350 QuantityADCBPriceATCMCAVC