If the Price of Copper Pipes Is $70 in a Perfectly

question 151

Multiple Choice

If the price of copper pipes is $70 in a perfectly competitive market, and a firm is producing a quantity at which the marginal cost is $65, is this firm maximizing profit?

• A) Yes, this firm is maximizing profit.
• B) No, this firm should produce more output to maximize profit.
• C) No, this firm should produce less output to maximize profit.
• D) A determination cannot be made without knowing the marginal revenue.

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Definitions:

Endowment

An endowment is the total of a person's or entity's assets, minus liabilities, considered in the context of their financial impact or wealth.

Clothing

Items worn on the body, typically made from fabrics or textiles, used for protection, adornment, or social status.

Comparative Advantage

The ability of an entity to produce a good or service at a lower opportunity cost than another entity, facilitating beneficial trade.

Autarky

An economic system where a region or country is self-sufficient and has no trade with the outside world.