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:

Component

An individual part of a larger system, machine, or piece of equipment that contributes to its function.

Unit Sales

The measure of the total quantity of a product sold, often used as a metric for tracking the performance of consumer goods.

Revenue

The total income generated from normal business operations and other activities over a specific period of time.

Items Sold

The total quantity of products or services sold by a business within a specific period.