If a Perfectly Competitive Firm Produces at an Output Level

question 92

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 firm is maximizing its revenue.
• C)there is no reason to reduce or expand output,as long as AVC is greater than or equal to price.
• D)the difference between TR and TC is zero.
• E)the firm should shut down.

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Definitions:

HDC Rights

Rights of a Holder in Due Course, which protect the holder of a negotiable instrument from certain defenses and claims that could invalidate the instrument.

Indorses

Signs or writes one's name on the back of (a document) to make it transferable or to add details, also referred to as endorsing.

Note Payable

A written promise to pay a specified amount of money, usually with interest, at a future time.

Good Faith

A principle that implies honesty and sincerity of intention in the fulfillment of one's duties or negotiation.