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:

Alternative Dispute Resolution

A method for settling disputes outside of the courtroom, such as through arbitration or mediation.

Mediation

A method of settling disputes outside of court by using the services of a neutral third party, called a mediator. The mediator acts as a communicating agent between the parties and suggests ways in which the parties can resolve their dispute.

International Business Transactions

Economic activities that involve the exchange of goods, services, or information across national borders.

Arbitration Clauses

Provisions in a contract that require disputes to be resolved through arbitration, instead of through court litigation.