If a Perfectly Competitive Firm Faces a Market Price of $3

question 97

Multiple Choice

If a perfectly competitive firm faces a market price of $3 per unit,and it decides to produce 30,000 units,the market price will likely:

• A)increase.
• B)decrease.
• C)stay the same.
• D)Cannot answer without more information.

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Definitions:

Liquidation Expenses

Costs associated with closing down a business, including selling assets, paying off creditors, and distributing any remaining assets to shareholders.

Cash Balance

The amount of cash a company holds in its accounts at a given time.

Safe Distribution

The allocation of resources or assets in a manner that minimizes risk and ensures the security of such distribution.

Account Balances

The amounts in financial accounts at a specific point in time, representing resources, obligations, or ownership equity.