Table 14-6
Suppose That a Firm in a Competitive Market

question 99

Multiple Choice

Table 14-6
Suppose that a firm in a competitive market faces the following revenues and costs:
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$$\begin{array} { | c | c | c | } \hline \begin{array} { c } \text { Quantity } \\\text { (Units) }\end{array} & \begin{array} { c } \text { Total Revenue } \\\text { (Dollars) }\end{array} & \begin{array} { c } \text { Total Cost } \\\text { (Dollars) }\end{array} \\\hline 0 & 0 & 3 \\\hline 1 & 6 & 5 \\\hline 2 & 12 & 8 \\\hline 3 & 18 & 12 \\\hline 4 & 24 & 17 \\\hline 5 & 30 & 23 \\\hline 6 & 36 & 30 \\\hline 7 & 42 & 38 \\\hline\end{array}$$ ​
-Refer to Table 14-6. The firm should not produce an output level beyond

• A)4 units.
• B)5 units.
• C)6 units.
• D)7 units.

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Definitions:

Duty of Compensation

The obligation to make payment or restitution to someone for loss, suffering, or injury.

Obligation

A legal or moral duty to do or refrain from doing something.

Agent

A person or entity appointed to act on behalf of another in dealings with third parties, often in commercial transactions.

Employer-Employee Relationship

This refers to the formal relationship between an employer who hires an employee to perform some duty in exchange for compensation.