If You Were the Owner of a Price-Taker Firm Operating

question 53

Multiple Choice

If you were the owner of a price-taker firm operating at an output level where the marginal cost of producing another unit was $5, and the market price was $7, then you

• A) could increase your profit by expanding output.
• B) could increase your profit by decreasing output.
• C) are maximizing your profit at your current output level.
• D) will be able to earn positive economic profits in the long run.

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Definitions:

Wheat

A cereal grain that is a staple food for much of the world's population, used to make products like bread, pasta, and pastries.

Industrialized Agriculture

An approach to farming that relies on heavy machinery, chemical inputs, and large-scale monoculture practices to increase productivity and output.

Developed Countries

Nations that have a high level of industrialization, a high standard of living, and a high Human Development Index (HDI), marked by well-developed infrastructure, healthcare, and education systems.

Domesticated Animal Species

Animal species that have been selectively bred and genetically adapted over generations to live closely with humans, often for work, food, or as pets.