Consider a Perfectly Competitive Industry in the Short-Run

question 101

Multiple Choice

Consider a perfectly competitive industry in the short-run.When a firm in this industry is at its profit-maximizing level of output,it

• A)is doing as well as it can and is making a profit.
• B)may be making a profit or incurring a loss.
• C)is producing where P = AVC.
• D)is producing where MC = AC.
• E)is producing where price exceeds marginal cost.

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Definitions:

Evaluate

The process of calculating the numerical value of an expression.

Numerical Coefficient

A number that multiplies a variable in an algebraic expression, giving the term its numerical value.

Like Terms

Terms in algebraic expressions that have the same variable parts and can be combined.

Collect Like Terms

The process in algebra of simplifying expressions by combining terms that have the same variables raised to the same power.