Question

figure 13 - 11
price and cost per unit
p4
p3
p2
p1
0
o1
o2
o3
o4
quantity
mc
atc
mr
demand
refer to figure 13 - 11. the diagram depicts a firm
o in a constant - cost industry.
o in an increasing - cost industry.
o in long - run equilibrium.
o that is making short - run losses.

Explanation:

The diagram shows a firm with price ($P$) and cost - related curves such as Marginal Cost ($MC$), Average Total Cost ($ATC$), Marginal Revenue ($MR$) and Demand. The firm is producing at a quantity where $MR = MC$ (at $Q_2$). The price $P_4$ is above the $ATC$ at the quantity produced, indicating positive economic profit in the short - run. There is no indication of long - run equilibrium as there is profit which will attract new entrants. Also, there is no information about industry costs changing with the entry or exit of firms. Since price is above $ATC$ at the profit - maximizing quantity, the firm is not making short - run losses.

Answer:

None of the provided options are correct based on the above analysis.