Table 14-7 Suppose That a Firm in a Competitive Market Faces the Faces

question 221

Multiple Choice

Table 14-7
Suppose that a firm in a competitive market faces the following revenues and costs:
-Refer to Table 14-7. If the firm is currently producing 14 units, what would you advise the owners?

• A)decrease quantity to 13 units
• B)increase quantity to 15 units
• C)continue to operate at 14 units
• D)increase quantity to 16 units

---

Definitions:

Competitive Industry

An industry where no single firm has a large market share and each firm must compete on price, quality, and innovation to attract customers.

Market Price

The existing rate at which a product or service is available for buying or selling within a marketplace.

Demand

Demand is the quantity of a good or service that consumers are willing and able to purchase at various prices within a given time frame, reflecting their desire and purchasing power.

Profit-Maximizing Output

The point of production where a company reaches its maximum profit potential.