Suppose a Perfectly Competitive Firm Is Producing a Level of Output

question 152

Multiple Choice

Suppose a perfectly competitive firm is producing a level of output for which price equals average total cost,and average total cost is less than marginal cost.In order to maximize its profits,the firm should

• A)reduce its output.
• B)expand its output.
• C)produce zero output.
• D)increase the market price.
• E)not change its output.

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Definitions:

1-Bromopentane

An organobromine compound consisting of a five-carbon alkane with a bromine atom attached to the primary carbon.

Di-sec-Butyl Ether

An organic compound formed by the dehydration reaction between two sec-butyl alcohol molecules, resulting in an ether with a dialkyl structure.

Sec-Butanol

A secondary alcohol with the chemical formula C4H10O, where the hydroxyl group is connected to the second carbon in a butane chain.

Sulfuric Acid

A highly corrosive strong mineral acid with the molecular formula H2SO4, widely used in industry for processes including fertilizer manufacturing, oil refining, and wastewater processing.