Assume That at the Current Market Price,a Perfectly Competitive Firm's

question 46

Multiple Choice

Assume that at the current market price,a perfectly competitive firm's profit-maximizing level of output yields total revenues that are just equal to total costs.Which of the following statements applies to this firm?

• A)The firm should shut down right now.
• B)The firm should continue to operate in the short run to minimize losses, but shut down if things don't improve over the long run.
• C)The firm is earning zero economic profit and should continue to operate.
• D)The firm should increase its explicit costs to reduce its tax burden.

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Definitions:

Marginal Costs

The change in total production cost that arises when the quantity produced is incremented by one unit; it is critical for determining the optimal production level.

Theft and Burglary

Crimes involving the unauthorized taking of property; theft is the broader term, while burglary specifically refers to entering a building unlawfully with intent to commit theft or a felony.

Calorie Counts

Calorie counts refer to the measurement of energy in food and beverages, indicating the amount of energy that can be obtained through consumption.

Marginal Utility

The increase in contentment or utility received from the consumption of another unit of a good or service.