A Profit-Maximizing fiRm Is Producing an Output of 300 Units

question 14

Multiple Choice

A profit-maximizing firm is producing an output of 300 units where price is £10 per unit and average total cost is £8 per unit. Given that the firm operates in a perfectly competitive market, which of the following is likely to be true?

• A) The firm will stop production and exit the market.
• B) The firm will sell each unit of the product at a higher price.
• C) The market supply curve will shift to the right.
• D) The existing firms will exit the industry.

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Definitions:

Public Interest

The welfare or well-being of the general public and society as a whole.

Proprietorship

A type of business ownership where the business is owned and run by one individual who has full control and responsibility.

Single Individual

A term referring to one person, often used in the context of single-person households or individual decision-making.

Double Taxation

The imposition of two or more taxes on the same income, asset, or financial transaction.