A Perfectly Competitive Firm Can Produce Its Current Level of Output

question 149

Multiple Choice

A perfectly competitive firm can produce its current level of output at an average total cost of $10 and a marginal cost of $8. If the market price of the product is currently $8, what should the firm do?

• A)The firm should definitely shut down since average total cost exceeds price.
• B)The answer depends upon the relationship between price and average variable cost.The firm should shut down if average variable cost is $8 or greater, but the firm should continue to produce the current level of output if average variable cost is less than $8.
• C)The firm should increase production in order to increase profit.
• D)The firm should continue to produce, but they should decrease production in order to increase profit.

Identify the use and timing of proof statements and demonstrations in reducing buyer resistance.

Grasp the need for salesperson control and participation in the sales presentation process.

Comprehend the difference in credibility between company-generated and external proof statements.

Describe the components and considerations in the sales presentation goal model.

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Definitions:

Industry Supply

The total quantity of a product or service that all firms in a particular market or industry are willing and able to sell at various price levels.

Increase in Demand

A situation where more consumers are willing and able to purchase a good or service at each possible price, leading to a shift in the demand curve to the right.

Government Raise

An increase in government revenue, often achieved through raising taxes or adjusting fiscal policies, to support government spending.

Tax

A compulsory financial charge imposed by a governmental organization in order to fund various public expenditures.