If a Perfectly Competitive Firm Is Producing a Quantity Where

question 307

Multiple Choice

If a perfectly competitive firm is producing a quantity where P = MC,then profit:

• A)is maximized.
• B)can be increased by decreasing the quantity.
• C)can be increased by decreasing the price.
• D)can be increased by increasing production.

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Definitions:

Substitutes

Products or services that can replace each other in use, offering consumers choices in the marketplace.

Demand Curve

A graphical representation showing the relationship between the quantity of a good consumers are willing and able to purchase and its price.

Income

Money that an individual or business receives in exchange for providing a good or service or through investing capital.

Substitutes

are goods or services that can be used in place of each other, where an increase in the price of one leads to an increase in demand for the other.