If a Firm in a Perfectly Competitive Market Facing a Market

question 112

Multiple Choice

If a firm in a perfectly competitive market facing a market price of $2 decides to increase its production from 2,000 units to 4,000 units, the firm's marginal revenue:

• A)will increase from $4,000 to $8,000.
• B)will decrease from $8,000 to $4,000.
• C)will stay the same.
• D)None of these are correct.

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Definitions:

Sheep

Domesticated ruminant animals, typically kept as livestock for their wool, meat, and milk.

Classical Conditioning

A learning process that occurs when two stimuli are repeatedly paired; a response that is at first elicited by the second stimulus is eventually elicited by the first stimulus alone.

Responding Increases

The enhancement in the frequency or intensity of a behavior or reaction due to stimulation or reinforcement.

Pavlov's Experiment

A classical conditioning experiment by Ivan Pavlov demonstrating that dogs could be trained to salivate in response to a neutral stimulus when associated with food.