A Profit-Maximizing Firm in a Competitive Market Is Currently Producing

question 448

Multiple Choice

A profit-maximizing firm in a competitive market is currently producing 200 units of output. It has average revenue of $9 and average total cost of $7. It follows that the firm's

• A)average total cost curve intersects the marginal cost curve at an output level of less than 200 units.
• B)average variable cost curve intersects the marginal cost curve at an output level of less than 200 units.
• C)profit is $400.
• D)All of the above are correct.

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Definitions:

Placebo Effect

The phenomenon in which the expectations of the participants in a study can influence their behavior.

Subject Bias

Preconceived notions or attitudes exhibited by subjects in a study, potentially affecting the validity of the research or experiment outcomes.

Independent Variable

A variable in an experiment that is manipulated or changed by the researcher to investigate its effect on the dependent variable.

Treadmill

An exercise machine with a moving belt on which one can walk or run while staying in the same place.