If a Perfectly Competitive Firm Finds That Price Is Less

question 16

Multiple Choice

If a perfectly competitive firm finds that price is less than average variable cost, it should:

• A) not adjust output if marginal cost equals price.
• B) shut down immediately.
• C) increase output until price equals marginal cost.
• D) decrease output until price equals marginal cost.

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Definitions:

Incapable

Lacking the ability, strength, or competence to do something effectively or as required.

Sufficient

Enough to meet the needs of a situation or a proposed end.

Self-Awareness

The conscious knowledge of one's own character, feelings, motives, and desires, being aware of and understanding one's self.

Healthy Self-Esteem

A positive state of mind that involves recognizing one's own worth and abilities in a balanced and realistic manner.