In the Short Run,a Perfectly Competitive Firm Is Producing an Output

question 94

Multiple Choice

In the short run,a perfectly competitive firm is producing an output level where marginal cost equals $10,average total cost equals $7,and marginal revenue equals $9.Which of the following statements is correct?

• A)The firm is earning an economic profit which could be increased by raising output.
• B)The firm is earning an economic profit which could be increased by lowering output.
• C)The firm is maximizing its economic profit.
• D)The firm is suffering an economic loss which could be decreased by raising output.
• E)The firm is suffering an economic loss which could be decreased by lowering output.

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