If a Competitive Firm Maximizes Short-Run Profits by Producing Some

question 103

Multiple Choice

If a competitive firm maximizes short-run profits by producing some quantity of output,which of the following must be TRUE at that level of output?

• A) p = MC
• B) MR = MC
• C) p ≥ AVC
• D) All of the above.

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Definitions:

Capital

Financial assets or the financial value of assets, such as cash or goods, used by a company to fund its operations and facilitate its growth.

Double Taxation

The imposition of tax by two or more jurisdictions on the same declared income, asset, or financial transaction.

S Corporation

A type of corporation in the United States that elects to be taxed under Subchapter S of Chapter 1 of the Internal Revenue Code, allowing profits to be passed directly to shareholders and avoid double taxation.

Promoters

Individuals or entities that take the initiative in founding and organizing a business or corporation, often responsible for its early management and securing of initial capital.