The Data Below Are for a Competitive Business (Price-Taker) A)produce as Much as Possible
B)shut Down (Produce Nothing)

question 7

Multiple Choice

The data below are for a competitive business (price-taker) .If the market price is $300 per unit,the company should $\begin{array}{rrrrr}&\text { Average } & \text { Average } & \text { Average }\\\text { Output}& \text {Fixed Costs}& \text {Variable Costs}& \text {Total Costs} &\text {Marginal Cost }\\\hline0&\$ 3,000\\1 & \$ 3,000 & \$ 900 & \$ 3,900 & \$ 900 \\2 & \$ 1,500 & \$ 800 & \$ 2,300 & \$ 700 \\3 & \$ 1,000 & \$ 700 & \$ 1,700 & \$ 500 \\4 & \$ 750 & \$ 600 & \$ 1,350 & \$ 300 \\5 & \$ 600 & \$ 500 & \$ 1,100 & \$ 100 \\6 & \$ 500 & \$ 550 & \$ 1,050 & \$ 800 \\7 & \$ 429 & \$ 600 & \$ 1,029 & \$ 900 \\8 & \$ 375 & \$ 650 & \$ 1,025 & \$ 1,000 \\9 & \$ 333 & \$ 700 & \$ 1,033 & \$ 1,100 \\10 & \$ 300 & \$ 750 & \$ 1,050 & \$ 1,200\end{array}$

• A)produce as much as possible
• B)shut down (produce nothing).
• C)produce four units.
• D)produce six units.

---

Definitions:

Heuristic Processing

A method of problem-solving, learning, or discovery that employs a practical approach based on experience, immediate context, or a rule of thumb rather than explicit criteria.

Desired Outcomes

The specific results or consequences that an individual or group aims to achieve through their actions or decisions.

Representativeness Heuristic

A mental shortcut that involves judging the probability or frequency of an event by how much the event resembles the typical case.

Statistical Reasoning

The process of using statistical techniques and methods to analyze data and make conclusions based on data analysis.