If a Purely Competitive Firm Is Producing at Some Level

question 62

Multiple Choice

If a purely competitive firm is producing at some level less than the profit-maximizing output,then:

• A) price is necessarily greater than average total cost.
• B) fixed costs are large relative to variable costs.
• C) price exceeds marginal revenue.
• D) marginal revenue exceeds marginal cost.

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Definitions:

Operant Conditioning

A method of learning that occurs through rewards and punishments for behavior, thereby influencing the likelihood of that behavior being repeated.

Shaping

Shaping is a method of behavior modification that uses reinforcement strategies to guide a subject towards a desired behavior gradually.

Figure and Ground

A principle in perception that describes how people visually distinguish between an object (the figure) and its background (the ground), emphasizing one over the other.

Depth of Processing

A theory regarding the levels at which information is mentally processed, affecting its memorability and the strength of recall.