Suppose a Perfectly Competitive Firm Is in the Following Situation

question 268

Multiple Choice

Suppose a perfectly competitive firm is in the following situation: P = $10; output = 3,000; ATC = $11; MC = $10; and AVC = $7.50. Which statement is an accurate description of the firm's situation?

• A) The firm incurs a loss but is also minimizing its loss.
• B) The firm earns profit but should increase output to maximize its profit.
• C) The firm incurs a loss but should increase output to lose less.
• D) The firm incurs a loss and should shut down to lose less.

---

Definitions:

Huntington's Disease

A genetic disorder characterized by the progressive breakdown of nerve cells in the brain, leading to deterioration of physical and mental abilities.

Dominant Mutant Allele

A variant of a gene that is more potent in expressing its trait even in the presence of its normal counterpart.

Heterozygote Advantage

A phenomenon in which the heterozygous condition confers some special advantage on an individual that either homozygous condition does not (i.e., Aa has a higher degree of fitness than does AA or aa).

Chorionic Villus Sampling

A prenatal test where samples of the chorionic villi are taken to test for genetic disorders in the fetus.