Scenario 14-1 Assume a Certain Firm in a Competitive Market Is Producing

question 109

Multiple Choice

Scenario 14-1
Assume a certain firm in a competitive market is producing Q = 1,000 units of output. At Q = 1,000, the firm's marginal cost equals $15 and its average total cost equals $11. The firm sells its output for $12 per unit.
-Refer to Scenario 14-1. At Q = 1,000, the firm's profits equal

• A)−$200.
• B)$1,000.
• C)$3,000.
• D)$4,000.

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Definitions:

Natural Rate

The natural rate often refers to the natural rate of unemployment, which is the level of unemployment consistent with a stable inflation rate over time.

Phillips Curves

A graphical representation indicating the inverse relationship between the rate of unemployment and the rate of inflation in an economy.

Expected Inflation

The anticipated rate at which the general level of prices for goods and services will rise over a period.

High Inflation

A situation where there is a sustained, rapid increase in the general price level of goods and services in an economy over a period, eroding purchasing power.