I cannot seem to reason why option B is a correct statement. From what I understood when AC = MC we're at a competitive equilibrium or break-even point and after that the more we move to the right the respective curve behaviors indicate to us that we're in a profit zone. However, how do we find the price of 8 CHF? Do we say P=MC=MR ?
Any help would be appreciated. enter image description here


1 Answer 1


B is not correct. Consistent with C (which is correct), we have $q=8$ when marginal cost and average cost are equal, but $MC(8)=2(8)+1=17\neq 8$.

The question does not say there is only one incorrect statement.


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