If a Competitive Firm Maximizes Short-Run Profits by Producing Some

question 7

Multiple Choice

If a competitive firm maximizes short-run profits by producing some quantity of output,which of the following must be true at that level of output?

• A) p = MC
• B) MR = MC
• C) p ≥ AVC
• D) All of the above

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Definitions:

Fiat Money

Currency that a government has declared to be legal tender, but it is not backed by a physical commodity.

The Euro

The official currency of 19 out of the 27 European Union countries, which forms a significant part of the world's economy.

Specialization In Production

The process by which individuals, businesses, or countries focus on producing a narrow range of goods or services to gain greater efficiencies.

Standard Of Living

Represents the level of wealth, comfort, material goods, and necessities available to a person, community, or society.