At Its Current Level of Quantity, a Perfectly Competitive Firm's

question 70

Multiple Choice

At its current level of quantity, a perfectly competitive firm's marginal revenue is $3.25, its short- run marginal cost is $3.25 and its long- run marginal cost is $3.25. Which of the following statements is true?

• A)The firm is maximizing both its short- run and long- run profit.
• B)The firm is maximizing its long- run profit, but not its short- run profit.
• C)The firm is not maximizing its short- run or long- run profit.
• D)The firm is maximizing its short- run profit, but not its long- run profit.

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Definitions:

Causal Relationships

Connections between two events where one event is understood to be a direct result of the other.

Generalization

A broad statement or an idea that applies to a group based on experiences with or observations of a smaller segment of the group.

Controlled Experiments

Experimental designs in which researchers manipulate variables under controlled conditions to determine cause and effect.

Correlation

A mutual relationship or connection between two or more things, where one does not necessarily cause the other.