If Two Perfectly Competitive Firms Produce the Same Quantity at the Market

question 184

Multiple Choice

If two perfectly competitive firms produce the same quantity at the market price, then, at that quantity, they must have the same

• A)marginal cost and average total cost
• B)marginal cost and average fixed cost
• C)average total cost and average fixed cost
• D)average fixed cost and average variable cost
• E)marginal cost

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Definitions:

Fiscal Expenditure

Government spending, including spending on goods and services, welfare, and public works, financed through taxation or borrowing.

Taxes

Taxes are compulsory financial charges or levies imposed by a government on individuals or entities to finance government spending and various public expenditures.

Aggregate Demand-Aggregate Supply Model

A macroeconomic model that explains price level and output through the relationship between aggregate demand and aggregate supply.

Long-Run Equilibrium

Refers to a state in an economy where all factors of production are efficiently utilized, and supply equals demand, leading to stable prices and full employment over time.