If a Profit-Seeking Competitive Firm Is Producing Its Profit-Maximizing Output

question 7

Multiple Choice

If a profit-seeking competitive firm is producing its profit-maximizing output and its total fixed costs fall by 25 percent, the firm should

• A) use more labor and less capital to produce a larger output.
• B) not change its output.
• C) reduce its output.
• D) increase its output.

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Definitions:

Comparison Person

An individual used as a benchmark to evaluate one's own situation, achievements, or performance in social comparison theory.

Need for Achievement

A psychological trait that drives individuals to succeed, accomplish challenging tasks, and set high standards for themselves.

Needs for Affiliation

The desire to form connections with others and maintain social relationships.

Salespersons

Individuals who sell products or services, often directly to customers, and are skilled in negotiation, communication, and persuasion.