Which of the Following Is a Characteristic Shared by a Perfectly

question 96

Multiple Choice

Which of the following is a characteristic shared by a perfectly competitive firm and a monopoly?

• A)Each must lower its price to sell more output.
• B)Each sets a price for its product that will maximize its revenue.
• C)Each maximizes profits by producing a quantity for which marginal revenue equals marginal cost.
• D)Each maximizes profits by producing a quantity for which price equals marginal cost.

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Definitions:

Borrow Money

The act of obtaining funds from another party with the promise of repaying the principal amount along with potential interest.

Buy Stocks on Margin

The practice of borrowing money from a broker to purchase stock, using the bought securities as collateral for the loan.

Risk Free Asset

An investment that is expected to return its original value without any loss and with a certain rate of interest; considered to have zero default risk.

Rate of Return

The increase or decrease in the value of an investment during a set time frame, represented as a proportion of the investment's original price.