Which of the Following Is True for a Profit-Maximizing Firm

question 34

Multiple Choice

Which of the following is true for a profit-maximizing firm operating in a competitive market,monopolistic competition,and monopoly?

• A) Firms earn positive economic profits in the long run.
• B) Firms earn zero economic profits in the long run.
• C) Profits are maximized when marginal cost equals marginal revenue.
• D) Price equals marginal revenue.
• E) Entry into the industry is impossible.

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Definitions:

Power

The capacity or ability to direct or influence the behavior of others or the course of events.

Prestige

The level of respect, admiration, or esteem that a person, organization, or entity is regarded with, often based on perceived success, achievement, or quality.

Superiority

The state or quality of being superior or better than others, often in skills, performance, or status.

Internal Locus

The belief that one controls their own destiny and outcomes are the result of personal effort and actions.