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The diagram illustrates isoprofit curves and the marginal cost curve of MQ2020, a luxury car manufactured by MQ Motors. Which statement incorrectly describes the diagram?
The diagram illustrates isoprofit curves and the marginal cost curve of MQ2020, a luxury car manufactured by MQ Motors. Which statement incorrectly describes the diagram? 10,000- 9,000- Price, marginal cost ($) 8,000- C (8, 7500) 7,000- Profit = Q(P-AC) Marginal cost Isoprofit curve: $150,000 Isoprofit curve: $70,000 Zero-economic-profit curve (AC curve) 6,000 5,000 4,000- 3,000 2,000- 1,000 0 A (35, 6000) B (40, 3300) 0 10 20 30 40 50 60 70 80 90 100 110 120 Quantity of cars, Q Select one: a. Points B and C give MQ Motors the same level of profit. O b. MQ Motors incurs increasing marginal cost. c. If MQ Motors sells 35 cars at P=$6,000, it makes profits larger than $70,000. O d. If MQ Motors sells 40 cars at P=$4,000, it will make negative economic profit. e. An isoprofit curve traces the combinations of price and quantity that give the same profit. Clear my choice
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