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:

Cent

The smallest denomination of currency in many countries, representing 1/100th of the basic unit of currency.

Significant Figures

The number of digits in a value that contribute to its accuracy, typically used in scientific measurements.

Percent

A ratio or fraction out of 100 representing a part of a whole.

Cent

A monetary unit that is equal to one hundredth of the base unit of currency in many countries, such as the dollar or euro.