When Economists Say That a Perfectly Competitive Firm Is a "Quantity

question 58

Multiple Choice

When economists say that a perfectly competitive firm is a "quantity adjuster," they mean that

• A)it adjusts its output in response to changes in prices.
• B)it can vary its output by an infinite amount.
• C)it is not concerned with cost factors.
• D)its marginal-cost curve coincides with its own demand curve.
• E)changing the output level does not affect the costs of production.

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Definitions:

Common Shares

A type of equity ownership in a corporation, with holders typically having voting rights and potentially receiving dividends, reflecting a share in the company's success or failure.

Retained Earnings

Profits that a company has earned to date, less any dividends or other distributions paid to shareholders.

Total Assets

The sum of all current and non-current assets owned by a company, indicating its overall value.

Sales/Total Assets

A financial ratio that measures how efficiently a company is using its assets to generate sales.