Consider a Perfectly Competitive Firm in the Following Position: Output

question 28

Multiple Choice

Consider a perfectly competitive firm in the following position: output = 4000 units,market price = $1,total fixed costs = $2000,total variable costs = $2000,and marginal cost = $1.To maximize profits the firm should

• A)reduce its output.
• B)expand its output.
• C)produce zero output.
• D)increase the market price.
• E)not change its output.

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Definitions:

Consumer Financial Protection Bureau

A regulatory agency charged with overseeing financial products and services offered to consumers.

Full Warranty

A guarantee without limitations covering a product's repair or replacement.

Consumer Product

A consumer product is a good or service that is intended for use by end consumers for personal, family, or household purposes.

Manufacturer

A person or company that makes goods for sale, especially in large quantities and as a commercial operation.