A Firm Sells a Product in a Purely Competitive Market

question 27

Multiple Choice

A firm sells a product in a purely competitive market.The marginal cost of the product at the current output of 800 units is $3.50.The average variable cost is $3.00.The market price of the product is $4.00.To maximize profits or minimize losses, the firm should

• A)continue producing 800 units.
• B)continue production, but produce less than 800 units.
• C)increase production to more than 800 units.
• D)shut down.

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Definitions:

Monosaccharides

The simplest form of carbohydrates, consisting of single sugar molecules like glucose and fructose, that serve as energy sources.

Reducing Sugars

Sugars capable of acting as reducing agents, having free aldehyde or ketone groups that allow them to reduce other compounds, commonly tested by Benedict's or Fehling's solution.

Ketose

A type of monosaccharide (simple sugar) where the carbonyl group is a ketone, found in several biochemical pathways.

Aldose

A type of carbohydrate that contains an aldehyde group as its carbonyl functional group.