Refer to Figure 13-17. Suppose the firm is currently producing Qf units. What happens if it increases its output to Qg units?
A) It will move from a zero profit situation to a loss situation
B) Its average cost of production will fall and its profit will rise.
C) It will move from a zero profit situation to a profit situation
D) It will be taking advantage of economies of scale and will be able to lower the price of its product.
A
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