If a Firm Is Producing a Quantity Along the Upward

question 42

Multiple Choice

If a firm is producing a quantity along the upward sloping portion of its marginal cost curve at which marginal cost exceeds price and is earning positive economic profits,it should

• A) continue to produce this quantity.
• B) decrease the quantity produced because doing so will increase profit.
• C) increase the quantity produced because profits are still positive.
• D) wait for the price to increase to its current marginal cost.

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Definitions:

Assertiveness

The quality of being self-assured and confident without being aggressive, effectively communicating one's needs and desires.

Personal Appeals

Requests or suggestions that are based on personal relationships or friendships rather than on formal authority or logic.

Exchange

The act of giving something to someone and receiving something else in return.

Inspirational Appeals

Techniques used to motivate others by appealing to their values, hopes, and aspirations.