Suppose a Perfectly Competitive Firm Is Producing a Level of Output

question 14

Multiple Choice

Suppose a perfectly competitive firm is producing a level of output such that its average revenue is less than its lowest average variable cost. The firm should

• A) not change its output.
• B) increase the market price.
• C) expand its output.
• D) reduce its output.
• E) shut down.

---

Definitions:

Coordinated Patterns

Organized behaviors or actions among individuals or groups that are synchronized to achieve a common goal.

Old-Timers

A term referring to people who have a lot of experience or have been in a particular area or field for a long time.

Retroactive Pessimism

The tendency to retrospectively view past events more negatively once an outcome is known, particularly if the outcome is undesirable.

Team Successes

these are accomplishments or achievements attained by a team as a result of its collective effort and cooperation.