Suppose a Perfectly Competitive Firm Faces the Following Situation: P

question 20

Multiple Choice

Suppose a perfectly competitive firm faces the following situation: P = $6; output = 2,000; ATC = $7; MC = $6; and AVC = $6.50. Which statement is an accurate description of the firm's situation?

• A) The firm incurs a loss and is minimizing its loss.
• B) The firm earns profit but is not maximizing its profit.
• C) The firm is maximizing profit.
• D) The firm incurs a loss but is not minimizing its loss.

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Definitions:

Physical Strength

Refers to the maximum amount of force that a muscle or group of muscles can exert in a single effort.

Hopeful Managers

Leaders who possess optimism and a positive outlook towards achieving goals, often inspiring and motivating their teams through challenges.

Attitudes

A consistent pattern of thoughts or feelings about an individual or object, usually evident in one's actions.

Behavior

The actions or reactions of an individual or a system in response to external or internal stimuli.