In Perfect Competition, When Firms Are Maximizing Profits and Households

question 16

Multiple Choice

In perfect competition, when firms are maximizing profits and households are maximizing utility,

• A) Pareto optimality has been obtained.
• B) voluntary exchange can be used to make both firms and households better off.
• C) the outcome is inefficient.
• D) individual welfare is maximized, but social welfare is not.

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Definitions:

Business Plan

A documented strategy for a new business that outlines goals, reasons they are attainable, and plans for reaching them.

Operating Report

A document or statement that provides an overview of an organization's operational activities, performance, and results over a specific period.

Position Plan

A strategic outline detailing one's intentions or desired achievements in a professional context.

Policy Report

An official document that outlines the stance, guidelines, or intentions of an organization, government, or group on a specific public issue or policy area.