A Competitive Firm Is Currently Producing a Quantity of Output

question 569

Multiple Choice

A competitive firm is currently producing a quantity of output at which marginal revenue exceeds marginal cost. In order to increase its profit, the firm should

• A)increase the price of the good that it produces and sells.
• B)increase its quantity of output.
• C)decrease its total cost.
• D)decrease its average total cost.

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Definitions:

Higher-Order Conditioning

A form of learning in which a stimulus is paired with a previously conditioned stimulus, creating the same conditioned response without directly being paired with the unconditioned stimulus.

Response Renewal

The reemergence of a previously extinguished response following a change in context.

Extinction

In psychology, the process by which a conditioned response diminishes and disappears following repeated exposure without reinforcement.

Stimulus Generalization

The process by which a conditioned response is triggered by stimuli that are similar, but not identical, to the original conditioned stimulus.