In Order to Maximize Profits,a Firm That Can Sell All

question 17

Multiple Choice

In order to maximize profits,a firm that can sell all it wants without affecting price should produce

• A)where average variable costs are minimized.
• B)where marginal cost is equal to average variable costs.
• C)where marginal cost is equal to price.
• D)where marginal cost is a minimum.

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Definitions:

Malthusian Trap

A theory suggesting that population growth tends to outpace agricultural production, leading to periodic famine, poverty, and population decline.

Social Policies

Public policies designed to promote social welfare and protect the well-being of the population.

Stable Population

Describes a population that maintains a constant size from year to year, as the birth rate and death rate are in equilibrium.

Preindustrial Cities

Urban areas that emerged before the advent of industrialization, characterized by limited size, economic activities centered around agriculture and crafts, and rudimentary infrastructure.