In a Perfectly Competitive Market,each Firm Maximizes Its Profit by Choosing

question 36

Multiple Choice

In a perfectly competitive market,each firm maximizes its profit by choosing only the quantity to produce.Regardless of whether the firm makes an economic profit or incurs an economic loss,the short-run equilibrium is efficient.This statement is

• A)false.The market is efficient only in the long run because it is only in the long run that economic profit equals zero.
• B)false.The firm chooses both the price and the quantity to produce in a perfectly competitive market.
• C)true.The firm is a price taker so it chooses only the quantity to produce.The market is efficient because at the short-run equilibrium,marginal social benefit equals marginal social cost.
• D)true.The firm is a price taker so it chooses only the quantity to produce.A competitive market is efficient in the short run but it is inefficient in the long run.
• E)false.In a perfectly competitive market,each firm chooses the price that maximizes its economic profit.

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Definitions:

Pyruvate

A three-carbon compound that plays a vital role in energy production and biosynthetic processes in cells.

Glycolysis

A metabolic pathway that converts glucose into pyruvate, releasing energy and producing ATP and NADH, occurring in the cytosol of cells.

Citric Acid Cycle

A series of chemical reactions used by all aerobic organisms to generate energy through the oxidation of acetate.

Acetyl CoA

A molecule that conveys the carbon atoms within the acetyl group to the citric acid cycle (Krebs cycle) to be oxidized for energy production.