Suppose a Perfectly Competitive Firm Knows That It Is Not

question 70

Multiple Choice

Suppose a perfectly competitive firm knows that it is not going to shut down,but it is going to earn a loss.It should pick the output level where:

• A)total costs are minimized.
• B)price equals marginal cost.
• C)total revenues are maximized.
• D)the costs of the variable factors of production are minimized.

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Definitions:

Average Tax Rate

The percentage of total income that is paid in taxes, calculated by dividing the total tax paid by the taxpayer's total income.

Interest Income

Earnings received from deposit accounts or investments through the payment of interest.

Eligible Dividends

Dividends that are designated by a corporation to be eligible for a lower tax rate for the receiver, depending on jurisdiction.

Average Tax Rate

The percentage of total income that goes to taxes, calculated by dividing the total amount of tax paid by the total income.