Scenario 14-2 Assume a Certain Firm Is Producing Q = 1,000 Units

question 241

Multiple Choice

Scenario 14-2
Assume a certain firm is producing Q = 1,000 units of output. At Q = 1,000, the firm's marginal cost equals $20 and its average total cost equals $25. The firm sells its output for $30 per unit.
-Refer to Scenario 14-2. To maximize its profit, the firm should

• A)increase its output.
• B)continue to produce 1,000 units.
• C)decrease its output but continue to produce.
• D)shut down.

---

Definitions:

Short-Term Memory

A psychological term referring to the capacity for holding a small amount of information in an active, readily available state for a short period of time.

Autobiographical

Pertaining to the events of one's own life history, often depicted in personal writings, narratives, or memoirs.

Dishabituation

A renewal of attention or a response to a stimulus that had previously become familiar through habituation.

Stimulus

An external factor or event that provokes a specific functional reaction in an organ or tissue.