If a Competitive Price-Taker Firm Is Currently Producing a Level

question 164

Multiple Choice

If a competitive price-taker firm is currently producing a level of output at which marginal cost exceeds marginal revenue, then

• A) average revenue exceeds marginal cost.
• B) the firm is earning a positive profit.
• C) a one-unit decrease in output would increase the firm's profit.
• D) All of the above are correct.

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Definitions:

Business Idea

A concept that can be used for commercial purposes, typically identifying a product, service, or opportunity that can generate profit.

Full Funding

Ensuring that all necessary or projected funds are available for a program or project.

Leverage

The use of borrowed capital or debt to increase the potential return of an investment.

Potential Returns

The expected financial gains or profits that may be realized from an investment or business venture.