If a Firm Is a Profit Maximizer and Faces Positive

question 29

Multiple Choice

If a firm is a profit maximizer and faces positive marginal costs,

• A) there is a natural limit to the size of the firm, where MR = 0.
• B) there is no natural limit to the size of the firm; it can be as large as it wants to be.
• C) there is a natural limit to the size of the firm, where MR > 0.
• D) there is no natural limit to the size of the firm, hence the need for government regulation.

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Definitions:

Mechanical Deficiency

A state or condition resulting from the inadequate physical functioning of a structure or mechanism.

Spiral Organ

A structure in the cochlea of the inner ear responsible for converting sound vibrations into neural signals.

Sound Waves

Audible disturbances that propagate through the air or other materials and are perceivable when they arrive at the ear of a human or animal.

Sense Organs

Organs that receive stimuli (like the eyes, ears, nose, tongue, and skin) and send information to the brain via the nervous system to be interpreted.