The "Invisible Hand" in a Competitive Market Pushes the Firms

question 165

Multiple Choice

The "invisible hand" in a competitive market pushes the firms in the market to

• A)charge a price that is equal to their marginal revenue.
• B)produce an output level that allows them to earn some positive economic profits.
• C)use resources and produce output that maximize consumer and producer surplus.
• D)operate where their individual demand curve is above their long-run average cost curve.

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Definitions:

Plunger

A tool used to clear blockages in pipes and drains, consisting of a rubber suction cup attached to a stick.

Syringe

A medical instrument used to inject or withdraw fluids from the body.

Barrel

A cylindrical container traditionally made of wooden staves bound by iron hoops, used for storing and transporting liquids like wine, oil, and beer.

Elasticity

Ability to return to shape after being stretched.