If the Profit-Maximizing Quantity of Production for a Competitive Firm

question 42

Multiple Choice

If the profit-maximizing quantity of production for a competitive firm occurs at a point where the firm's average total cost of production is falling as production increases, then the firm

• A)will be earning positive economic profit at the profit-maximizing quantity.
• B)will have economic profit less than zero at the profit-maximizing quantity.
• C)will have zero economic profit at the profit-maximizing quantity.
• D)should increase the quantity of production to increase profit.

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Definitions:

College Diploma

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Discretionary Income

The portion of a person's income that remains available for spending, investment, or savings once taxes and essential personal expenses have been deducted.

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Individuals who spend money in an extravagant and uncontrolled manner.