For a Perfectly Competitive Firm, Which of the Following Is

question 105

Multiple Choice

For a perfectly competitive firm, which of the following is not true at profit maximization?

• A)Market price is greater than marginal cost.
• B)Marginal revenue equals marginal cost.
• C)Total revenue minus total cost is maximized.
• D)Price equals marginal cost.

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Definitions:

Economic Profit

The difference between total revenue and total cost, including both explicit and implicit costs.

Investment

The allocation of resources, usually financial, into assets with the expectation of generating income or profit in the future.

Economic Rent

A return on an asset or payment to a factor of production in excess of what's necessary to keep it in its current use.

LAC

Long-run Average Cost, which represents the per unit cost of production when all inputs, including capital, are variable.