A Perfectly Competitive Firm's Output Price Is $5 and the Firm

question 9

Multiple Choice

A perfectly competitive firm's output price is $5 and the firm is producing 37 units with a marginal cost of $3.The firm should:

• A)lower its price.
• B)decrease production.
• C)increase production.
• D)raise its price.

---

Definitions:

Demand Forecast

The process of estimating the quantity of a product or service that consumers will purchase in the foreseeable future.

Forecast Error

The difference between the actual outcomes and the predictions made by forecasting models, utilized to measure the accuracy of predictions.

Forecasts

Predictions about future events, such as sales, economic trends, or weather, based on historical data and analysis.

Expected Value

A calculated average of all possible values for a random variable, weighted by their probabilities, used in statistics and economics to determine the most likely outcome.