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A Competitive Firm Operating in the Short Run Is Maximizing

question 161

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A competitive firm operating in the short run is maximizing profits and just breaking even.Its costs include a monthly state license fee of $100 that must be paid for as long as the firm operates.If the license fee is raised to $150,what should the firm do to maximize profits in the short run?


Definitions:

ERG Theory

A three-level hierarchical need theory of motivation (existence, relatedness, growth) that allows for movement up and down the hierarchy.

Alderfer

Psychologist Clayton Alderfer developed the ERG theory, which outlines three core needs: Existence, Relatedness, and Growth, as motivation drivers.

Maslow

Refers to Abraham Maslow, an American psychologist best known for creating Maslow's hierarchy of needs, a theory of psychological health predicated on fulfilling innate human needs in priority.

Growth Needs

Refers to the intrinsic desire for personal development, achievement, and self-actualization beyond basic material or survival needs.

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