If Firms Are Competitive and Profit Maximizing, the Price of a Good

question 233

Multiple Choice

If firms are competitive and profit maximizing, the price of a good equals the

• A)marginal cost of production.
• B)fixed cost of production.
• C)total cost of production.
• D)average total cost of production.

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Definitions:

Proprietorship

A business owned and run by one individual, where there is no legal distinction between the owner and the business.

Corporation

A legal entity separate from its owners that is authorized to conduct business, own assets, incur liabilities, and pay taxes.

Limited Liability

A legal structure that limits the personal financial risk of the business owners, protecting their personal assets from the debts and liabilities of the business.

Sole Proprietorship

A business owned and operated by a single individual, with no distinction between the business and the owner.