If the Profit-Maximizing Quantity of Production for a Competitive Firm

question 42

Multiple Choice

If the profit-maximizing quantity of production for a competitive firm occurs at a point where the firm's average total cost of production is falling as production increases, then the firm

• A)will be earning positive economic profit at the profit-maximizing quantity.
• B)will have economic profit less than zero at the profit-maximizing quantity.
• C)will have zero economic profit at the profit-maximizing quantity.
• D)should increase the quantity of production to increase profit.

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Definitions:

People

Human beings considered collectively, often within a specific group, society, or community.

Endowment Effect

A phenomenon in which people ascribe more value to things merely because they own them.

Examples

Specific instances or cases used to illustrate a principle, method, or phenomenon.

Self-Enhancement

The tendency for individuals to promote their self-image by focusing on positive feedback and minimizing negative feedback.