At an Output Level Above the Profit-Maximizing One for a Perfectly

question 12

Multiple Choice

At an output level above the profit-maximizing one for a perfectly competitive firm,a reduction in output will:

• A)reduce total revenue more than total cost.
• B)reduce total cost more than total revenue.
• C)increase total revenue more than total cost.
• D)increase total cost more than total revenue.
• E)decrease total revenue and total cost by the same amount.

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Definitions:

Comparative Advantage

The ability of an entity to produce a good or service at a lower opportunity cost than its competitors, underpinning international trade benefits.

Computers

Electronic devices capable of processing, storing, and communicating information according to a set of instructions called programs.

Comparative Advantage

The capability of a nation, person, corporation, or area to generate a product or service with a lesser opportunity cost compared to rivals.

Specializes

The process by which individuals, businesses, or countries focus on producing a limited scope of products or services to gain greater efficiency and expertise.