Suppose That in a Perfectly Competitive Industry,the Market Price of the Product

question 100

Multiple Choice

Suppose that in a perfectly competitive industry,the market price of the product is $6.A firm is producing the output level at which average total cost equals marginal cost,both of which are $8.Average variable cost is $4.To maximize its profits in the short run,the firm should

• A)reduce its output.
• B)expand its output.
• C)leave its output unchanged.
• D)shut down.
• E)There is insufficient information to know.

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Definitions:

Air Toxics Program

A regulatory program aimed at reducing airborne pollutants that are known or suspected to cause cancer, birth defects, or other serious health effects.

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A group of naturally occurring fibrous minerals used in building materials and products, known for its durability and fire resistance but also for health risks such as mesothelioma.

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A chemical compound used in manufacturing and known for its carcinogenic properties; often found in oil, gasoline, and cigarette smoke.

Resource Conservation

The practice of managing the use of natural resources wisely to ensure their availability and quality for future generations.