If, for the Last Unit of a Good Produced by a Perfectly

question 66

Multiple Choice

If, for the last unit of a good produced by a perfectly competitive firm, MR > MC, then in producing that unit the firm

• A)added more to total costs than it added to total revenue.
• B)added more to total revenue than it added to total costs.
• C)added an equal amount to both total revenue and total costs.
• D)maximized profits or minimized losses.

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Definitions:

Average Total Cost

The total cost divided by the number of units produced, representing the cost per unit of output.

Demand Curve

A graph showing the relationship between the quantity of a good that consumers are willing to buy and the price of the good.

Natural Monopolies

Industries or markets in which the production or supply of a good or service is most cost-effective when there is a single provider, due to high infrastructure or entry costs.

Government Regulated

Refers to activities, industries, or services that are controlled or supervised by government agencies to ensure compliance with laws and regulations.