If a Profit-Maximising Firm in a Competitive Market Discovers That

question 78

Multiple Choice

If a profit-maximising firm in a competitive market discovers that at its current level of production, price is less than marginal cost, it should:

• A)exit the industry
• B)increase its output
• C)keep output the same
• D)reduce its output

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Definitions:

Legitimate

Something that is legal, rightful, and in accordance with recognized or accepted standards or principles.

Coercive

Exerting or utilizing force, authority, or pressure in order to achieve compliance or control.

Legal Contract

A formal agreement between two or more parties, enforceable by law, outlining obligations and rights.

Standards Of Behavior

Established norms and expectations regarding how individuals should act within a group, organization, or society.