A Perfectly Competitive Firm Is Currently Producing at a Point

question 3

Multiple Choice

A perfectly competitive firm is currently producing at a point where price is $10 and both marginal cost and average variable cost are $7.To maximize profit or minimize loss in the short run,this firm should _____

• A)raise its price.
• B)increase its output.
• C)reduce its output.
• D)lower its price.
• E)shut down.

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Definitions:

Efficiency Wages

Wages set above the market equilibrium to increase worker productivity, reduce turnover, and avoid shirking.

Bureau of Labor Statistics

A U.S. government agency that collects and disseminates various labor economics statistics, including unemployment and wage data.

Labor Force

The total number of people, both employed and unemployed, who are actively seeking and available for work in the economy.

Labor Force

The total number of people who are employed and those who are actively seeking employment.