Scenario 9-1 Assume a Certain Competitive Price-Taker Firm Is Producing

question 200

Multiple Choice

Scenario 9-1 Assume a certain competitive price-taker firm is producing Q = 1,000 units of output. At Q = 1,000, the firm's marginal cost equals $15 and its average total cost equals $11. The firm sells its output for $12 per unit.
Refer to Scenario 9-1. To maximize its profit, the firm should

• A) increase its output.
• B) continue to produce 1,000 units.
• C) decrease its output, but continue to produce.
• D) shut down.

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Definitions:

Duty Of Care

The legal obligation to avoid actions or omissions that could foreseeably harm others.

Principal

The primary party to a transaction, such as a contract or financial instrument, who has the rights and responsibilities directly related to it.

Agent

An individual authorized to act on behalf of another person or entity, often in a business setting.

Liability

A legal obligation or debt that an entity is bound to fulfill towards another party.