If a Purely Competitive Firm Is Producing at the MR

question 36

Multiple Choice

If a purely competitive firm is producing at the MR = MC output level and earning an economic profit, then

• A)the selling price for this firm is above the market equilibrium price.
• B)new firms will enter this market.
• C)some existing firms in this market will leave.
• D)there must be price fixing by the industry's firms.

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Definitions:

Norman Angell

British journalist, author, and Nobel Peace Prize laureate, best known for his work "The Great Illusion," which argued that the economic interdependence of nations would make war futile.

Gavril Princip

The Bosnian Serb nationalist who assassinated Archduke Franz Ferdinand of Austria in 1914, an event that sparked the outbreak of World War I.

Archduke Franz Ferdinand

The heir to the Austro-Hungarian throne whose assassination in 1914 in Sarajevo sparked the beginning of World War I.