Assume for a Competitive Firm That MC = AVC at $12

question 165

Multiple Choice

Assume for a competitive firm that MC = AVC at $12, MC = ATC at $20, and MC = MR at $16. This firm will

• A) realize a profit of $4 per unit of output.
• B) maximize its profit by producing in the short run.
• C) minimize its losses by producing in the short run.
• D) shut down in the short run.

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Definitions:

Conscious Level

The degree of awareness an individual has of their environment and their own existence, sensations, and thoughts.

Encoding

The method of transforming data into a format that can be retained in memory.

Retention

The ability to keep or hold information in memory, often discussed in the context of learning effectiveness.

Understanding

The ability to grasp the meaning, significance, or nature of something, often through insight, learning, or comprehension.