When the Marginal Cost of a Price-Taking Firm Is Less

question 167

Multiple Choice

When the marginal cost of a price-taking firm is less than the market price of its product,the firm should:

• A) expand output (provided that price is not less than average variable cost).
• B) reduce output (provided that price is not less than average variable cost).
• C) maintain output (provided that price is not less than average variable cost).
• D) charge more than the market price.

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Definitions:

Thanatos

In psychoanalytic theory, the death instinct, which is believed to drive destructive behaviors and thoughts.

Death Instinct

Death Instinct is a concept in psychoanalytic theory introduced by Sigmund Freud that suggests an unconscious drive in living beings toward death, destruction, and a return to the inorganic state of matter.

Destructive

Inflicting severe and irreversible damage or harm.

Hostile Attribution Bias

The tendency to perceive ambiguous actions by others as aggressive.