When the Perfectly Competitive Firm Produces the Quantity of Output

question 70

Multiple Choice

When the perfectly competitive firm produces the quantity of output at which marginal revenue equals marginal cost, it naturally

• A)produces the quantity of output at which marginal cost equals price, since for the perfectly competitive firm price equals marginal revenue.
• B)produces the quantity of output at which short-run average total cost equals price, since for the perfectly competitive firm short-run average total cost equals marginal revenue.
• C)earns a profit, since equating marginal revenue and marginal cost guarantees profit.
• D)takes a loss.

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Definitions:

Development

The process of economic, social, and cultural growth, expansion, or evolution, often associated with progressive changes.

Implementation

The act of putting a plan, decision, or agreement into effect.

Plan Success

Developing a strategic approach to achieve desired outcomes or targets.

Coordination

The act of organizing and making different elements work together effectively to achieve a goal.