Suppose, at Its Present Rate of Output, a Perfectly Competitive

question 11

Multiple Choice

Suppose, at its present rate of output, a perfectly competitive firm's marginal revenue exceeds both its marginal cost and its average variable cost.To maximize profit, the firm should

• A)lower the price
• B)raise the price
• C)increase output
• D)reduce output
• E)maintain its current rate of output

---

Definitions:

Interest

The cost of borrowing money or the payment received for lending money, usually calculated as a percentage of the principal amount.

Exchange Rates

The monetary value of one currency when swapped for another.

Journal Entries

The recordation of financial transactions in a company's accounting system, which includes a debit and credit entry for each transaction.

Cash Flow Hedge

A strategy used by companies to manage the risk associated with fluctuation in cash flow due to changes in foreign exchange rates, interest rates, or commodity prices.