If a Perfectly Competitive Firm Produces at an Output Level

question 23

Multiple Choice

If a perfectly competitive firm produces at an output level where marginal cost equals marginal revenue,then

• A)the last unit produced adds the same amount to costs as it does to revenue.
• B)the difference between TR and TC is zero.
• C)the firm is maximizing its revenue.
• D)the firm should shut down.
• E)there is no reason to reduce or expand output,as long as AVC is greater than or equal to price.

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Definitions:

Sensitive-insensitive

A descriptor indicating variability in an individual's response to emotional or sensory stimuli, ranging from highly responsive (sensitive) to barely affected (insensitive).

Self-schema

A cognitive representation that incorporates beliefs and feelings about oneself in specific domains.

Man-as-scientist

This term refers to the idea that individuals actively interpret and analyze their surroundings and experiences in a systematic and empirical manner, similar to the methods used by scientists.