When a Firm Maximizes Its Profit,which of the Following Is

question 76

Multiple Choice

When a firm maximizes its profit,which of the following is correct for firms in monopolistic competition and perfect competition?

• A) P = MC for both types of firms.
• B) P = MR = MC for firms in perfect competition, and P > MR = MC for firms in monopolistic competition.
• C) MR = MC for firms in perfect competition and MR > MC for firms in monopolistic competition.
• D) P > MR = MC for firms in both perfect competition and monopolistic competition.
• E) P = ATC always for firms in both perfect competition and monopolistic competition.

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Definitions:

Single Buyer

A market situation where there is only one buyer for a particular product or service, influencing the market conditions and prices.

Input Market

Markets where firms purchase resources and services needed for the production process, such as labor, raw materials, and machinery.

Labor Union

An organization of workers formed to protect and further their rights and interests through collective bargaining.

National Labor Relations (Wagner) Act

A 1935 United States federal law that protects the rights of employees to organize, form unions, and engage in collective bargaining, while prohibiting certain unfair labor practices.