Suppose a Perfectly Competitive Firm Faces the Following Short-Run Cost

question 295

Multiple Choice

Suppose a perfectly competitive firm faces the following short-run cost and revenue conditions: ATC = $12; AVC = $10; MC = $15; MR = $16. The firm should

• A) increase output.
• B) decrease output.
• C) increase price.
• D) change nothing.

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Definitions:

Colonization

The act of establishing control over a foreign land and its people by a country or group, often leading to exploitation and cultural assimilation.

Abundant Natural Resources

The availability of a large quantity of natural materials that can be utilized for economic gain, such as minerals, forests, and water.

Long Hours

Working time that extends beyond the typical or standard working hours, often associated with high demands and stress.

Dependency Theory

A theory suggesting that economic development of nations is a relational process, where some countries' continued expansion is at the expense of others, leading to a state of dependency.