If a Perfectly Competitive Firm Produces at an Output Level

question 84

Multiple Choice

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

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

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Definitions:

Harm-Reduction Approach

A strategy aimed at minimizing the negative health, social, and legal impacts associated with various human behaviors, without necessarily eliminating the behaviors.

Sponsorship

The provision of support, resources, or funding to an individual or event by an organization or individual, often for promotional purposes.

Contingency Management

A behavior modification technique that rewards positive behavior or punishes negative behavior to enhance motivation and encourage changes in behavior.