When a Firm Produces a Level of Output on the Production

question 20

Multiple Choice

When a firm produces a level of output on the production function:

• A) Marginal physical product is zero.
• B) Maximum efficiency is achieved.
• C) Opportunity cost for resources is at a maximum.
• D) Profits are maximizeD.

---

Definitions:

Price Elasticity

The measure of how much the quantity demanded of a good responds to a change in the price of that good, demonstrating the sensitivity of consumers to price changes.

Quantity Purchased

The total number of units of a product or service bought by consumers in a specified period.

Price Elasticity

The evaluation of demand's reaction to fluctuations in the price of a particular good.

Responsiveness

The degree to which a variable responds to a change in an underlying factor, often used in economic contexts to describe changes in supply, demand, price, etc.