Shama Is Producing Candles in a Perfectly Competitive Market

question 257

Multiple Choice

Shama is producing candles in a perfectly competitive market.When she produces 500 candles,her total cost is $250.If she produces one additional candle,her total cost increases to $260.In order to maximize her profit,she should produce the additional candle

• A) if the market price for a candle is $12.
• B) only if the market price exceeds $260 for a candle.
• C) only if the market price exceeds $250 for a candle.
• D) if the market price for a candle exceeds $0.50.
• E) if her price exceeds her average total cost.

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Definitions:

Cognitive Processes

The mental activities of an individual, including perception, memory, reasoning, problem-solving, and decision-making.

Behavioral Responses

Actions or reactions of an individual in response to external or internal stimuli.

External Stimuli

Are outside factors or events that influence an individual's physiological and psychological reactions.

Middle-Range Theory

A theory that focuses on explaining phenomena within a specific, limited range of contexts, bridging the gap between grand theories and empirical observations.