The diagram illustrates isoprofit curves and the marginal cost curve of MQ2020, a luxury car manufactured by MQ Motors. Which statement incorrectly describes the diagram?10,0009,0008,000-7,000-6,000-5,000-4,0003,0002,0001,000Price, marginal cost (5)C(8,7500)*A (35,6000)(40, 3300)Profit-QP-AC)Marginal costhoprofit curve $150,000boprofit curve $70,000Zenic procure (AC00 10 20 30 40 50 60 70 80 90 100 110 120Quantity of cars, QSelect oneOa if the price is equal to the average cost, MQ Motors' profits decrease until it sells 40 cars, and then start to increase.Ob Given the same quantity of cars, MQ Motors" profits increase as price increases.OC The shape of MQ Motors' cost function affects the shape of their isoprofit curvesOd. MQ Motors incurs increasing marginal costOe It MQ Motors sells 35 cars at P-$5,000, it makes profits higher than $70,000.

Different combinations of factor inputs at a given market cost are represented by an isocost curve…

Price, marginal cost (5) 10,000 9,000 8,000 7,000- 6,000 5,000 4,000 3,000 2,000- 1,000 0 0 C(8,2500) A (35,6000) (40, 3300) Profit-QP-AC) Marginal cost hoprofit curve $150,000 boprofit curve $70,000 c profit cury Ze 10 20 30 40 50 60 70 80 90 100 110 120 Quantity of cars, Q ove Od. MQ Motors incurs increasing marginal cost. Oe. If MQ Motors sells 35 cars at P-$6.000, it makes profits higher than $70,000 by MQ Motors, which stat Select one Oa if the price is equal to the average cost, MQ Motors profits decrease until it sells 40 cars, and then start to increase. Ob. Given the same quantity of cars MQ Motors profits increase as price increases. Oc The shape of MQ Motors' cost function affects the shape of their isoprofit curves

Price, marginal cost (5) 10,000 9,000 8,000 7,000- 6,000 5,000 4,000 3,000 2,000- 1,000 0 0 C(8,2500) A (35,6000) (40, 3300) Profit-QP-AC) Marginal cost hoprofit curve $150,000 boprofit curve $70,000 c profit cury Ze 10 20 30 40 50 60 70 80 90 100 110 120 Quantity of cars, Q ove Od. MQ Motors incurs increasing marginal cost. Oe. If MQ Motors sells 35 cars at P-$6.000, it makes profits higher than $70,000 by MQ Motors, which stat Select one Oa if the price is equal to the average cost, MQ Motors profits decrease until it sells 40 cars, and then start to increase. Ob. Given the same quantity of cars MQ Motors profits increase as price increases. Oc The shape of MQ Motors' cost function affects the shape of their isoprofit curves

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter4: Extent (how Much) Decisions

Section: Chapter Questions

Problem 3MC

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