If a Perfectly Competitive Firm Is Producing 200 Units And

question 16

Multiple Choice

If a perfectly competitive firm is producing 200 units and, at the 200th unit, the difference between marginal revenue and marginal cost (MR - MC) is positive, which of the following is true?

• A)The firm should decrease production to maximize profit.
• B)The firm should increase production to maximize profit.
• C)The 200th unit costs more to produce than the firm earns in revenue.
• D)The firm is maximizing profit.

---

Definitions:

Chlorophyll

A pigment found in plants and algae that absorbs sunlight for photosynthesis, giving them their green color.

Denitrification

The microbial process of reducing nitrate and nitrite to gaseous forms of nitrogen, such as nitrogen gas, effectively removing nitrogen from ecosystems.

Gaseous Nitrogen

Nitrogen in its gaseous state, making up about 78% of the Earth's atmosphere and serving as a critical element for life.

Root Nodules

Swollen lumps on roots of certain leguminous plants containing symbiotic nitrogen-fixing bacteria, crucial for converting atmospheric nitrogen into a form plants can use.