In a Perfectly Competitive Market,each Firm Maximizes Its Profit by Choosing

question 36

Multiple Choice

In a perfectly competitive market,each firm maximizes its profit by choosing only the quantity to produce.Regardless of whether the firm makes an economic profit or incurs an economic loss,the short-run equilibrium is efficient.This statement is

• A)false.The market is efficient only in the long run because it is only in the long run that economic profit equals zero.
• B)false.The firm chooses both the price and the quantity to produce in a perfectly competitive market.
• C)true.The firm is a price taker so it chooses only the quantity to produce.The market is efficient because at the short-run equilibrium,marginal social benefit equals marginal social cost.
• D)true.The firm is a price taker so it chooses only the quantity to produce.A competitive market is efficient in the short run but it is inefficient in the long run.
• E)false.In a perfectly competitive market,each firm chooses the price that maximizes its economic profit.

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Definitions:

Cranial Nerve IX

Also known as the Glossopharyngeal nerve, it is responsible for taste and other functions of the throat (pharynx) and mouth.

Tongue Blade

A small medical tool used to depress the tongue to allow examination of the mouth and throat.

Snellen Chart

A tool used to measure visual acuity, consisting of lines of letters, numbers, or symbols in decreasing size.

Auscultating

The act of listening to the internal sounds of the body, typically using a stethoscope, as a part of medical diagnosis.