Suppose That Marginal Revenue for a Perfectly Competitive Firm Is

question 71

Multiple Choice

Suppose that marginal revenue for a perfectly competitive firm is $20 .When the firm produces 10 units,its marginal cost is $20,its average total cost is $22,and its average variable cost is $17.Then to maximize its profit in the short run,the firm

• A) should stay open and incur an economic loss of $20.
• B) must increase its output to increase its profit.
• C) must decrease its output to increase its profit.
• D) should shut down.
• E) should not change its production because it is already maximizing its profit and is making an economic profit.

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Definitions:

Poor Law

Legislation aimed at providing aid and support to the impoverished segments of society, notably the English Poor Laws which established a system of poor relief.

Assistance

The act of helping or aiding someone or something, often referring to support provided by individuals, organizations, or governments.

Community

A group of people living in the same place or having a particular characteristic in common, often sharing a sense of identity and belonging.

Puritanism

A movement within the Church of England aiming at purifying the church of Roman Catholic practices, emphasizing predestination, and leading a godly life.