If a Purely Competitive Firm Is Producing Where Price Exceeds

question 8

Multiple Choice

If a purely competitive firm is producing where price exceeds marginal cost, then

• A) the firm will fail to maximize profit, but resources will be efficiently allocated.
• B) the firm will fail to maximize profit and resources will be overallocated to the product.
• C) the firm will fail to maximize profit and resources will be underallocated to the product.
• D) resources will be underallocated to the product, but the firm will maximize profit.

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