A Perfectly Competitive Firm Has a Random Marginal Cost with a 50

question 144

Multiple Choice

A perfectly competitive firm has a random marginal cost with a 50 percent chance of a high marginal cost of $10, a 30 percent chance of a marginal cost of $8, and a 20 percent chance of a low marginal cost of $5. What is the firm's expected marginal cost?

• A)$7.80
• B)$9.20
• C)$8.40
• D)$8.00

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Definitions:

Classical Conditioning

The method of instruction where a response is learned by associating a stimulus from the environment with one that occurs naturally.

Unconditioned Stimulus (US)

A stimulus that naturally triggers a response without any prior learning or conditioning.

Conditioned Stimulus (CS)

An initially neutral stimulus that, after being linked with an unconditioned stimulus, comes to elicit a conditioned response over time.

Generalization

The process by which the brain applies specific responses learned from past experiences to new situations or stimuli that are similar but not identical.