If a Firm in a Perfectly Competitive Market Is Producing

question 106

Multiple Choice

If a firm in a perfectly competitive market is producing at a level of output where marginal costs are equal to marginal revenue, it:

• A)should cut back production to increase profits.
• B)should increase production to increase profits.
• C)is producing a profit-maximizing quantity.
• D)may or may not need to change production, but this cannot be known without more information.

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Definitions:

Shaping

A training technique that involves gradually reinforcing behaviors that come closer and closer to a targeted action.

Partial Responses

In medical and psychological treatments, reactions that show some improvement due to therapy but do not fulfill all criteria for complete remission.

Reinforcement

In operant conditioning, a process that increases the likelihood of a behavior by applying a positive stimulus or removing a negative one.

Insight

The capacity to gain an accurate and deep understanding of someone or something.