The Profit-Maximizing Perfectly Competitive Firm Charges a Price Equal to __________

question 78

Multiple Choice

The profit-maximizing perfectly competitive firm charges a price equal to __________ while the profit-maximizing monopolistic competitive firm charges a price __________.

• A)marginal revenue; equal to marginal cost
• B)marginal cost; greater than marginal cost
• C)marginal revenue; greater than marginal revenue
• D)average fixed cost; greater than average total cost
• E)b and c

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Definitions:

Unrealized Loss

A loss that occurs on paper due to the decrease in value of an investment but has not yet been realized through actual sale or exchange.

Net Income

Net income is the total profit of a company after all expenses and taxes have been deducted from revenue. It is often referred to as the bottom line.

Trading Securities

Financial securities that a company holds primarily for the purpose of trading them in the short term for profit from their price changes.

Passive Investment

An investment strategy involving minimal buying and selling actions, focusing instead on long-term holding and typically relying on market-wide growth.