Exhibit 8-12 Marginal revenue and cost per unit curves

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A graph depicts four distinct curves. Quantity of output (in units per week) is on the horizontal axis where the only values labeled are X, Y, and Z. Price and costs per unit (in dollars) are on the vertical axis where the only values labeled are A, B, C, and D. Maginal cost is checkmark-shaped and passes through the points (X,A), (Y,B), and (Z,D). Margianl revenue (MR) is a straight horizontal line that passes through (0,D), (X,D), (Y,D), and (Z,D). Average total cost curve (ATC) is an upward-facing parabola that passes through (Y,B). Average variable cost (AVC) is an upward-facing parabola that passes through (X,A). Point (X,A) is labeled E. Point (Y,B) is labeled F. Point (X,D) is labeled L. Point (Y,D) is labeled H. Point (Z,D) is labeled I.





As shown in Exhibit 8-12, if the firm's price is D, the firm will supply:

a. Y units and break even.
b. Z units and make an economic profit.
c. zero units of output because it is unprofitable.
d. X units and incur a loss.