If the Market Price Is $4 and a Perfectly Competitive

question 88

Multiple Choice

If the market price is $4 and a perfectly competitive firm is producing 500 units and the marginal cost to produce the 500th unit is $5.13, which of the following is true?

• A)The firm should increase production to maximize profit.
• B)The difference between marginal revenue and marginal cost (MR - MC)for the 500th unit is negative.
• C)The firm is maximizing profit.
• D)The difference between marginal revenue and marginal cost (MR - MC)for the 500th unit is positive.

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Definitions:

Independent Variable

In experimental research, the variable that is manipulated by the researcher to examine its effect on the dependent variable.

Systematic Differences

Variations that are consistent and predictable, occurring due to specific factors or conditions in a controlled manner.

Eye-Movement Desensitization Reprocessing

A psychotherapy treatment designed to alleviate the distress associated with traumatic memories through guided eye movements.

Post-Traumatic Stress Disorder

A mental health condition triggered by experiencing or witnessing a terrifying event, characterized by flashbacks, nightmares, severe anxiety, and uncontrollable thoughts about the event.