Equilibrium Price Is $19 in a Perfectly Competitive Market

question 88

Multiple Choice

Equilibrium price is $19 in a perfectly competitive market. For a perfectly competitive firm, MR = MC at 120 units of output. At 120 units, ATC is $11, and AVC is $8. The best policy for this firm is to __________ in the short run. Also, this firm earns __________ of __________ if it produces and sells 120 units. Finally, the difference between total revenue and total fixed cost for this firm is __________.

• A)continue to produce; profits; $960; $1,920
• B)continue to produce; losses; $960; $1,000
• C)shut down; losses; $1,200; $2,300
• D)continue to produce; profits; $1,920; $1,960
• E)none of the above

---

Definitions:

Mean

The mean, or average, of a series of numbers is obtained by dividing the sum of the numbers by how many numbers there are.

Smallest Value

The minimum value in a set of data points.

Negative

A term that describes a value less than zero, indicating direction, charge, or a decrease in a measurable quantity.

Central Location

A statistical term that refers to the center or typical value in a set of data, often measured by mean, median, or mode.