If for a Firm MRP > MFC, Then the Firm

question 90

Multiple Choice

If for a firm MRP > MFC, then the firm

• A)is maximizing profits and should continue producing its current output.
• B)is minimizing factor costs and therefore is maximizing profits.
• C)should produce more output by increasing the quantity of factors employed.
• D)should produce less output by decreasing the quantity of factors employed.

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Definitions:

Equity

The concept of fairness and justice within the processes, distribution, and outcomes in society or specific situations.

Tax System

A tax system is the structured way in which taxes are collected by a government to fund public spending on goods and services.

Ceteris Paribus Error

A mistake in economic reasoning where other relevant factors or variables are assumed to remain constant when they do not.

Causality

The relationship between cause and effect, where one event is understood to be the direct consequence of another.