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Which of the Following Statements Is TRUE

question 24

Multiple Choice

Which of the following statements is TRUE?
I. If a competitive firm sells its product at a price of $80, the firm should increase production from 100 to 101 units if the total cost rises from $2,000 to $2,066.
II. If the marginal cost of the tenth unit is $14 and the marginal revenue is $10, the firm should produce the tenth unit to increase profits by $4.
III. For competitive firms, profits are maximized at MR = MC or P = MC, since P = MR.


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