If a Perfectly Competitive Firm Can Sell Each Unit of Output

question 131

Multiple Choice

If a perfectly competitive firm can sell each unit of output for $9, and the marginal cost of the last unit produced is $8.50, then the:

• A)extra benefit of the last unit produced is less than the extra cost.
• B)firm should lower its output level in order to increase profits.
• C)firm is earning an average profit of $0.50.
• D)extra benefit of the last unit produced is greater than the extra cost.

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Definitions:

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Hand coverings which encase the four fingers together and the thumb separately, designed to provide warmth.

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