Suppose a Perfectly Competitive Firm Can Increase Its Profits by Reducing

question 66

Multiple Choice

Suppose a perfectly competitive firm can increase its profits by reducing its output. Then it must be the case that the firm's:

• A) marginal revenue equals its marginal cost.
• B) price exceeds its marginal cost.
• C) price exceeds its marginal revenue.
• D) marginal cost exceeds its marginal revenue.

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Definitions:

Sample Mean

The average value of a subset of a larger population, used to estimate the population mean.

Finite Population Correction

A statistical adjustment applied when sampling without replacement from a finite population, to improve the accuracy of estimates like means and proportions.

Standard Error

A statistic that measures the dispersion of sample means around the population mean, often used to estimate the accuracy of a sample mean compared to the actual population mean.

Population Size

The total number of individuals or units in the group or area being studied.