Assume That Price Is Greater Than Average Variable Cost

question 91

Multiple Choice

Assume that price is greater than average variable cost.If a perfectly competitive seller is producing at an output where price is $11 and the marginal cost is $14.54, then to maximise profits the firm should

• A)continue producing at the current output.
• B)produce a larger level of output.
• C)produce a smaller level of output.
• D)There is not enough information given to answer the question.

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Definitions:

Payroll Tax

Levies applied to employers or employees, most often calculated as a portion of the wages that employers disburse to their personnel.

Regressive

A term often used in taxation to describe a situation where the tax rate decreases as the taxable amount increases, placing a higher relative burden on lower earners.

Top Income Levels

Refers to the highest segment of earners in an economic distribution, often associated with a significant proportion of the total income of a society.

Progressive

Pertaining to a form of taxation in which the tax rate increases as the taxable amount increases, typically applied to income tax.