Suppose That a Perfectly Competitive Firm's AVC Curve Is Given

question 33

Multiple Choice

Suppose that a perfectly competitive firm's AVC curve is given by AVC = WQ, and its marginal cost curve is given by MC = 2WQ, where W is the wage rate. Assume W = 20. At a market price of $3,200, the firm will produce a quantity of ____ to maximize profit.

• A) 200
• B) 160
• C) 120
• D) 80

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Definitions:

Tubercle

A small rounded projection or nodule, especially one that is part of the structure of a bone.

Genu Valgum

A medical condition characterized by the inward angulation of the knees, commonly referred to as "knock-knees."

Genu Varum

A condition characterized by the outward bowing of the legs, commonly referred to as "bowlegs."

Hallux

The medical term for the big toe.