If a Perfectly Competitive Firm Produces at an Output Level

question 92

Multiple Choice

If a perfectly competitive firm produces at an output level where marginal cost equals marginal revenue,then

• A)the last unit produced adds the same amount to costs as it does to revenue.
• B)the firm is maximizing its revenue.
• C)there is no reason to reduce or expand output,as long as AVC is greater than or equal to price.
• D)the difference between TR and TC is zero.
• E)the firm should shut down.

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Definitions:

Critical Value

A critical value is a point on the distribution that represents a threshold above which significant results are considered to occur.

Statistical Hypotheses

Statements made for statistical testing, including a null hypothesis and possibly an alternative hypothesis, concerning the parameters or distribution of a population.

Research Hypotheses

Proposals made by researchers that predict a potential outcome, relationship, or effect that will be tested through study or experimentation.

Data Analysis

The process of inspecting, cleansing, transforming, and modeling data to discover useful information and support decision-making.