If, for the Last Unit of a Good Produced by a Perfectly

question 256

Multiple Choice

If, for the last unit of a good produced by a perfectly competitive firm, MR > MC, then in producing it, the firm

• A)added more to total costs than it added to total revenue.
• B)added more to total revenue than it added to total cost.
• C)is maximizing marginal profit.
• D)has minimized its losses.

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Definitions:

Consumption

The process by which households make use of goods and services.

Interest Rate

The portion of a loan accumulating interest for the borrower, usually articulated as an annual percentage of the unpaid loan balance.

Income

The financial compensation gained from selling goods or services, or through other means such as rental income or investments.

Utility Function

An economic concept representing a user's satisfaction levels with varying consumption of goods or services, ranked from less to more preferred.