If a Perfectly Competitive Firm Is Producing at the Output

question 7

Multiple Choice

If a perfectly competitive firm is producing at the output level where marginal revenue is equal to marginal cost and at this output level, the firm's total revenue is less than its variable cost, the firm______.

• A)is earning a competitive return
• B)should increase production
• C)should decrease production
• D)should shut- down

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Definitions:

Marketing Planning Process

A methodical approach to planning marketing strategies and tactics, involving situational analysis, setting goals, defining strategies, budgeting, and monitoring.

Palm Computing Inc.

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CDSTEP Factors

An acronym standing for Cultural, Demographic, Social, Technological, Economic, and Political factors that influence a company's external marketing environment.

Economic

Related to the production, consumption, and transfer of wealth, and the study of how individuals, businesses, governments, and nations make choices on allocating resources.