Suppose That in a Perfectly Competitive Industry, the Market Price

question 44

Multiple Choice

Suppose that in a perfectly competitive industry, the market price of the product is $12. Firm A is producing the output level at which average total cost equals marginal cost, both of which are $10. To maximize its profits, Firm A should

• A) increase its advertising.
• B) change the price of the product.
• C) reduce its output.
• D) leave its output unchanged.
• E) expand its output.

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Definitions:

Simple Columnar Cells

A type of epithelial cell that is column-shaped and designed to absorb or secrete substances, commonly found in the digestive tract and uterus.

Ventral Body Cavities

The body's anterior (front) cavities, including the thoracic, abdominal, and pelvic cavities, housing major internal organs.

Serous

Relating to or producing a watery fluid, like that found lining certain cavities or as a component of blood serum.

Mucous

A thick, slippery substance produced by mucous membranes and glands to lubricate and protect certain parts of the body like the nasal passages and gastrointestinal tract.