If a Purely Competitive Firm Is Producing at the MR

question 100

Multiple Choice

If a purely competitive firm is producing at the MR = MC output level and earning an economic profit, then

• A) the selling price for this firm is above the market equilibrium price.
• B) new firms will enter this market.
• C) some existing firms in this market will leave.
• D) there must be price fixing by the industry's firms.

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Definitions:

Selective Information Processing

The cognitive process by which an individual focuses on specific information while ignoring other pieces of information, often based on biases or pre-existing beliefs.

Manipulating Appraisals

Involves altering the way a situation is perceived in order to manage emotional responses to that situation.

Social Comparison

The process by which individuals evaluate their own abilities and opinions by comparing themselves to others.

Symbol System

A set of symbols and rules for combining them, which might be used for communication, such as language, or representation of data and processes.