Suppose, at Its Present Rate of Output, a Perfectly Competitive

question 11

Multiple Choice

Suppose, at its present rate of output, a perfectly competitive firm's marginal revenue exceeds both its marginal cost and its average variable cost.To maximize profit, the firm should

• A)lower the price
• B)raise the price
• C)increase output
• D)reduce output
• E)maintain its current rate of output

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Definitions:

Great Depression

A severe worldwide economic downturn that took place during the 1930s, marked by high unemployment and deflation in most countries.

Production Possibilities Curve

A graphical representation illustrating the maximum quantity of two goods that can be produced within a given period under the conditions of a fixed amount of resources and technology.

Infrastructure

The fundamental facilities and systems serving a country, city, or area, including transportation and communication systems, power plants, and schools.

Unemployment Rate

The proportion of the working sector that lacks employment but is in the hunt for jobs.