For a Perfectly Competitive Firm $S T C = 100 + 20 q + q ^ { 2 } \text { and } S M C = 20 + 2 q$

question 69

Multiple Choice

For a perfectly competitive firm, $S T C = 100 + 20 q + q ^ { 2 } \text { and } S M C = 20 + 2 q$ . If the market price is equal to 40, what is the maximum profit the firm can earn?

• A)400
• B)200
• C)100
• D)0

Understand the roles of firm entry and exit in determining market equilibrium in the long run.

Analyze the impact of external market forces on equilibrium points and firm behavior.

Understand the difference between diminishing marginal productivity and its effect on total product versus total cost.

Grasp the basic concept of profit calculation and the distinction between total revenue and total cost.

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Definitions:

Trade Surpluses

Occurs when a country's exports exceed its imports over a given period, indicating a net inflow of domestic currency from foreign markets.

Productivity Rate

Measures the efficiency of production in an economy, often calculated as total output per unit of input, such as labor, over a specific period of time.

Current Account Deficit

A measurement of a country's trade where the value of the goods and services it imports exceeds the value of the products it exports.

U.S. Dollars

The official currency of the United States, widely used as a benchmark and reserve currency globally.