Suppose That in a Perfectly Competitive Industry, the Market Price

question 96

Multiple Choice

Suppose that in a perfectly competitive industry, the market price of the product is $6. A firm is producing the output level at which average total cost equals marginal cost, both of which are $8. Average variable cost is $4. To maximize its profits in the short run, the firm should

• A) leave its output unchanged.
• B) -- there is insufficient information to know.
• C) reduce its output.
• D) expand its output.
• E) shut down.

---

Definitions:

Effective Communication Process

A structured manner of exchanging information that ensures the message is sent, received, and understood as intended.

Information Overload

A state of feeling overwhelmed due to the excessive amount of information available, making it difficult to make decisions or understand an issue.

Problem-solving

The process of identifying a problem, developing possible solution paths, and taking the appropriate course of action to solve it.

Professionalism

The level of excellence or competence that is expected of a professional in the workplace, characterized by skill, good judgment, and polite behavior.