If a Competitive Firm Has a U-Shaped Marginal Cost Curve

question 23

Multiple Choice

If a competitive firm has a U-shaped marginal cost curve then:

• A) the profit-maximizing output will always generate positive economic profit.
• B) the profit-maximizing output will always generate positive producer surplus.
• C) the profit-maximizing output is found where MC = MR and MC is decreasing.
• D) the profit-maximizing output is found where MC = MR and MC is constant.
• E) the profit-maximizing output is found where MC = MR and MC is increasing.