A Firm in a Perfectly Competitive Industry Is Maximizing Its

question 123

Multiple Choice

A firm in a perfectly competitive industry is maximizing its profits at 400 units of output. If the marginal revenue and marginal cost are each $35 and the firm's average total cost is $25, this firm's profit is

• A) $0.
• B) $10.
• C) $4,000.
• D) $14,000.

---

Definitions:

Optimal Cost

The lowest possible cost at which a particular set of goods or services can be produced or acquired, taking into consideration factors such as efficiency and resource allocation.

Double-subscripted Variables

Variables in mathematical modeling that are indexed by two subscripts, often used to represent elements in matrices or two-dimensional arrays.

Price Range

The difference between the highest and lowest prices at which a commodity or service is traded over a particular period of time.