If a Perfectly Competitive Firm Is Producing a Quantity Where

question 6

Multiple Choice

If a perfectly competitive firm is producing a quantity where P > MC,then the firm can increase profit by:

• A)making no change in output or price because it is already maximizing profit.
• B)increasing the price.
• C)decreasing the price.
• D)increasing production.

Analyze the relationship between money supply and price levels in the economy.

Evaluate the effects of changing velocity of money on economic outcomes.

Distinguish between proportional, more than proportional, and less than proportional changes in economic variables.

Understand the implications of the Quantity Theory of Money in a static economy.