In a Perfectly Competitive Market, If a Firm Finds It

question 223

Multiple Choice

In a perfectly competitive market, if a firm finds it is producing an amount of output such that its marginal cost exceeds its price, it will

• A) immediately shut down for the short run.
• B) be maximizing profits.
• C) increase its output to increase its profit.
• D) decrease its output to increase its profit.

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Definitions:

Human Capital

The economic value of a worker's experience and skills, including education, training, intelligence, skills, health, and other things employers value in employees.

Tariffs

Tariffs are taxes imposed by a government on imported goods and services to protect domestic industries or to generate revenue.

Real GDP

Real GDP (Gross Domestic Product) measures the value of economic output adjusted for price changes, providing a more accurate reflection of an economy's size and how it's growing over time.

Growth Rate

The percentage increase in a country’s economic output or an individual company's earnings over a specific period, signaling economic health.