Which of the Following Is True for a Purely Competitive

question 155

Multiple Choice

Which of the following is true for a purely competitive firm in short-run equilibrium?

• A) The firm is making only normal profits.
• B) The firm's marginal cost is greater than its marginal revenue.
• C) The firm's marginal revenue is equal to its marginal cost.
• D) A decrease in output would lead to a rise in profits.

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Definitions:

Asymmetric Information

Asymmetric information occurs when one party in a transaction has more or better information than the other, potentially leading to an imbalance in the transaction.

Market Transaction

An exchange of goods, services, or financial assets in return for money between parties within a marketplace.

Emission Control Devices

Technologies or equipment installed on vehicles or industrial plants to reduce pollutants released into the atmosphere.