For a Perfectly Competitive Firm, When MC Is Less Than

question 79

Multiple Choice

For a perfectly competitive firm, when MC is less than MR

• A) the producer has an incentive to expand output.
• B) the producer has an incentive to decrease output.
• C) the producer has no incentive to change production.
• D) economic profits must be positive.

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Definitions:

Credit Card

A financial instrument that allows the cardholder to borrow funds from a pre-approved limit to pay for goods and services.

Money Supply

The entire sum of monetary holdings accessible in an economy at a certain period.

Travelers Checks

Preprinted, fixed-amount checks designed to allow the person signing them to make payments or exchange for local currency, used mainly by travelers to protect against theft or loss.

M1 Balance

The most liquid components of the money supply, including physical currency, demand deposits, and other assets that can quickly be converted to cash.