Figure 9-16 If the Price-Taker Firm in Figure 9-16 Is Currently Producing

question 192

Multiple Choice

Figure 9-16
If the price-taker firm in Figure 9-16 is currently producing 6 units, then to maximize profit in the short run, it should

• A) keep producing 6 units
• B) increase production to 12 units
• C) increase production to 14 units
• D) increase production to 8 units
• E) shut down

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Definitions:

Perfect Competitor

A theoretical market structure characterized by many sellers and buyers, homogeneous products, and free entry and exit, leading to efficient pricing and resource allocation.

Long Run

In economics, the long run refers to a period in which all factors of production and costs are variable, allowing for adjustment to changes in market conditions.

Marginal Revenue

The extra revenue obtained by selling an additional unit of a product or service.

Marginal Cost

The increase in cost resulting from the manufacture of one extra product or service unit.