If a Price Taker Produces an Output Level Where Price

question 64

Multiple Choice

If a price taker produces an output level where price is greater than marginal cost,then the firm should

• A) pay more to its variable factors of production.
• B) pay more to its fixed factors of production.
• C) decrease output to earn a higher profit or a smaller loss.
• D) increase output to earn a higher profit or a smaller loss.
• E) leave its output decision unchanged.

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Definitions:

Convergent Boundary

A tectonic plate boundary where two plates move toward one another, often resulting in mountain building, earthquakes, and volcanic activity.

Volcanism

The geological process through which magma and associated gases and ashes are expelled onto the Earth's surface or into the atmosphere.

Sinkholes

Natural depressions or holes in the Earth's surface caused by the removal of soil and bedrock, often due to water erosion.

Methane Gas

A colorless, odorless flammable gas that is a major component of natural gas, potent greenhouse gas contributing to global warming.