Table 14-9 Suppose That a Firm in a Competitive Market Faces the Faces

question 547

Multiple Choice

Table 14-9
Suppose that a firm in a competitive market faces the following revenues and costs:
-Refer to Table 14-9. If the firm's marginal cost is $11, it should

• A)increase production to maximize profit.
• B)increase the price of the product to maximize profit.
• C)advertise to attract additional buyers to maximize profit.
• D)reduce production to increase profit.

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Definitions:

Rational Self-Interest

The principle that individuals tend to make decisions that maximize their own utility or benefit, underpinning much of economic theory.

Economic Decision Makers

Individuals or entities responsible for choosing what to produce, how to produce, and for whom to produce in an economy, including households, businesses, and governments.

Welfare

Government-provided support for those unable to support themselves, including financial assistance, healthcare, and social services.

Rational Self-Interest

The principle that individuals tend to make decisions based on their own benefit, guided by the information available to them and their own preferences.