If a Purely Competitive Firm Is Producing at Some Output

question 21

Multiple Choice

If a purely competitive firm is producing at some output level less than the profit-maximizing output, then

• A) price is necessarily greater than average total cost.
• B) fixed costs are large relative to variable costs.
• C) price exceeds marginal revenue.
• D) marginal revenue exceeds marginal cost.

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Definitions:

Reasonable Manner

Acting in a way that is considered sensible and appropriate under the circumstances by a standard of a reasonable person.

Necessary

Refers to something that is essential or required in a particular situation or for a particular process.

Adequate Food

Having access to sufficient quantities of food that is nutritious and safe to eat, fulfilling dietary needs for an active and healthy life.

Lodging

Lodging refers to temporary accommodations for travelers, such as hotels, motels, inns, or short-term rentals.