If a Perfectly Competitive Firm Finds That the Price Exceeds

question 122

Multiple Choice

If a perfectly competitive firm finds that the price exceeds its ATC,then the firm

• A) will raise its price to increase its economic profit.
• B) will lower its price to increase its economic profit.
• C) is making an economic profit.
• D) is incurring an economic loss.
• E) is making zero economic profit.

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Definitions:

Basic Dimensions

Theoretically exact measurements specified on drawings, from which tolerances are applied to define allowable variation.

Geometric Characteristic

Refers to any feature of a part or assembly that can be defined in terms of geometry, such as size, shape, orientation, or position.

Position

Refers to the specific location or orientation of an object or component relative to a base or reference point.

Positional Tolerancing

A method of specifying the permissible variation in the position of a part feature relative to its intended design location.