A Firm Sells a Product in a Purely Competitive Market

question 74

Multiple Choice

A firm sells a product in a purely competitive market. The marginal cost of the product at the current output of 500 units is $1.50. The average variable cost is $1.00. The market price of the product is $1.25. To maximize profits or minimize losses, the firm should

• A) continue producing 500 units.
• B) continue production, but produce less than 500 units.
• C) increase production to more than 500 units.
• D) shut down.

---

Definitions:

Hutu Majority

The ethnic group that constitutes the majority of the population in Rwanda, historically involved in conflict with the Tutsi minority.

Prejudiced Discriminator

An individual who acts out their prejudices and biases towards others, often based on race, sexuality, gender, or any other characteristic, resulting in discriminatory behavior.

Ethnic Names

Names that are closely associated with a particular ethnic or cultural background, often carrying historical and familial significance.

Human Resources

The department within an organization focused on recruiting, managing, and providing direction for the people who work in the organization.