Table 14-8 Suppose That a Firm in a Competitive Market Faces the Faces

question 373

Multiple Choice

Table 14-8
Suppose that a firm in a competitive market faces the following revenues and costs:

-Refer to Table 14-8.In order to maximize profits,the firm will produce

• A) 1 unit of output because marginal cost is minimized.
• B) 4 units of output because marginal revenue exceeds marginal cost.
• C) 6 units of output because marginal revenue equals marginal cost.
• D) 8 units of output because total revenue is maximized.

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Definitions:

Law of Small Numbers

A cognitive bias that leads people to infer or generalize outcomes from a small sample size, mistakenly treating it as representative of a larger population.

Double-Standard Thinking

The application of different sets of principles for similar situations, often leading to unfair or biased judgments.

Prototype

An early sample, model, or release of a product or concept used to test a process or act as a thing to be replicated or learned from.

Ingroup Differentiation Bias

A bias where individuals perceive greater variation and uniqueness among members of their own group (ingroup) compared to those in an outgroup.