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:

Cnidarians

A phylum of aquatic animals that includes jellyfish, corals, and sea anemones, characterized by a simple body structure with a single opening and a body wall made of two layers of cells.

Flagellated

Describes cells or organisms that have one or more whip-like appendages used for movement.

Stinging Cells

Specialized cells found in certain animals like jellyfish that can inject a toxin into predators or prey.

Skeletal Material

The substance that forms the supportive framework of an organism, including bone and cartilage in humans.