Post Utme Aaua 2019 Economics Question 1

Practice objective / multiple choice question 1 from the 2019 Post Utme Aaua Economics examination.

Post Utme Aaua 2019 Economics Objective / Multiple Choice
Question 1 POST_UTME_AAUA • 2019 • ECONOMICS • objective

Consider a firm operating in a perfectly competitive market with a given demand curve. If the firm's marginal revenue (MR) curve intersects the average variable \cost (AVC) curve at point A, and the marginal \cost (MC) curve intersects the AVC curve at point B, which of the following is true?

Answer Options

A. The firm is operating in the short run and is incurring losses.
B. The firm is operating in the long run and is earning normal profits.
Correct Answer C. The firm is operating in the short run and is earning supernormal profits.
D. The firm is operating in the long run and is incurring losses.
Correct Answer
C
Correct Option:
The firm is operating in the short run and is earning supernormal profits.

About This Question

This is Post Utme Aaua 2019 Economics Question 1. It is one of the objective questions from the 2019 Post Utme Aaua Economics examination.

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