A Perfectly Competitive Firm Is Producing at the Point at Which

question 41

Multiple Choice

A perfectly competitive firm is producing at the point at which marginal cost equals marginal revenue. If the firm increases production,total revenue ________ and economic profit ________.

• A)increases;increases
• B)increases;decreases
• C)decreases;decreases
• D)decreases;increases
• E)increases;remains unchanged

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Definitions:

GDP Decreases

A decline in the Gross Domestic Product, indicating a reduction in the economic performance and output of a country.

Per Capita GDP

A measure of the total economic output of a country divided by the number of people, reflecting the average economic performance per person.

Natural Capital Degradation

The decline in the quality and quantity of natural resources such as air, water, and soil due to human activities or natural processes.

Economic Development

The process of improving the economic well-being and quality of life for a community, by increasing incomes and reducing poverty.