Which of the Following Statements Regarding a Competitive Firm Is

question 6

Multiple Choice

Which of the following statements regarding a competitive firm is correct?

• A)Because demand is downward sloping, if a firm increases its level of output, the firm will have to charge a lower price to sell the additional output.
• B)If a firm raises its price, the firm may be able to increase its total revenue even though it will sell fewer units.
• C)By lowering its price below the market price, the firm will benefit from selling more units at the lower price than it could have sold by charging the market price.
• D)For all firms, average revenue equals the price of the good.

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Definitions:

Direct Exporting

The process of selling goods and services from one country directly to customers in another country without using intermediaries.

Foreign Agent

An individual or organization that represents the interests of a foreign country within another nation, often required to register with the local government.

Commercial Activity

Business activities focused on the exchange of goods or services with the intent to earn profit.

Natural Resources

Raw materials and resources naturally occurring in the environment, such as minerals, forests, and water.