Which of the Following Is True Regarding a Perfectly Competitive

question 327

Multiple Choice

Which of the following is true regarding a perfectly competitive firm?

• A) The firm can charge a lower price than its competitors and thereby sell more output and increase its profits.
• B) The firm always earns a normal profit.
• C) The firm's marginal revenue continually decreases.
• D) The firm's minimum efficient scale is small relative to the market demand.

---

Definitions:

Promissory Note

A financial document in which one party promises in writing to pay a determinate sum of money to the other, either at a fixed or determinable future time or on demand of the payee, under specific terms.

Accounts Receivable

Amounts owed to a business by its customers for goods or services delivered or used but not yet paid for.

Note Duration

Note duration refers to the length of time until a financial note's principal and any accumulated interest are due to be repaid.

Interest Rate

The amount charged by a lender to a borrower for the use of assets, expressed as a percentage of the principal, typically noted on an annual basis.