Claude's Copper Clappers Sells Clappers for $40 Each in a Perfectly

question 103

Multiple Choice

Claude's Copper Clappers sells clappers for $40 each in a perfectly competitive market.At its present rate of output, Claude's marginal cost is $39, average variable cost is $25, and average total cost is $45.To improve his profit/loss situation, Claude should

• A)increase output
• B)reduce output but not to zero
• C)maintain the present rate of output
• D)shut down
• E)raise the price

---

Definitions:

Distal Stimulus

An object, event, or pattern as it exists in the world. Contrast with proximal stimulus.

Prägnanz

A principle from Gestalt psychology that suggests people will perceive and interpret ambiguous or complex images as the simplest form(s) possible.

Common Fate

Common fate is a principle of Gestalt psychology stating that elements moving in the same direction are perceived as a collective or unit.

Template Matching

A technique in digital image processing for finding portions of an image that match a template image.