If the Market Price for a Competitive Firm's Output Doubles

question 50

Multiple Choice

If the market price for a competitive firm's output doubles, then:

• A) the profit maximizing output will double.
• B) the marginal revenue doubles.
• C) at the new profit maximizing output, price has increased more than marginal cost.
• D) at the new profit maximizing output, price has risen more than marginal revenue.
• E) competitive firms will earn an economic profit in the long-run.

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Definitions:

Regression Model

A statistical technique that models and approximates the relationship between a dependent variable and one or more independent variables.

Multicollinearity

A statistical phenomenon in which two or more predictor variables in a multiple regression model are highly correlated, potentially distorting the results.

Standard Errors

Measures that provide an estimation of the sampling variation, usually referring to the standard deviation of the sample mean's distribution or other parameter estimates.

Slope Coefficients

In linear regression, these coefficients represent the degree of change in the dependent variable for a one-unit change in an independent variable.