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:

Probability Distribution

A math function tasked with computing the odds of different potential outcomes during an experiment.

Multiple Regression Model

A statistical technique that uses several explanatory variables to predict the outcome of a response variable.

Degrees of Freedom

Degrees of freedom refer to the number of independent values or quantities which can be assigned to a statistical distribution or to a system without violating any constraint.

Sum of Squares

A statistical measure of the dispersion of observation values given by the sum of the squared differences from the mean.