If a Perfectly Competitive Firm Raised the Price of Its

question 242

Multiple Choice

If a perfectly competitive firm raised the price of its product,

• A) its profits would increase.
• B) the quantity of output it sells decreases to zero.
• C) rival firms will follow suit and raise their prices also.
• D) the firm will be forced to advertise more.
• E) its total revenue would rise but its total cost would rise by more.

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Definitions:

Psychoanalytic Perspective

A theory of psychology that emphasizes unconscious psychological processes and contends that childhood experiences significantly affect adult personality.

Personality Disorders

Mental disorders characterized by enduring maladaptive patterns of behavior, cognition, and inner experience, shown across many contexts and deviating from cultural norms.

Reaction Formation

A defense mechanism where an individual unconsciously replaces unacceptable inner feelings with their opposite.

Overconfident

Overconfident describes an overestimation of one's abilities, knowledge, or success likelihood, which can impair judgment and decision-making.