Suppose That Marginal Revenue for a Perfectly Competitive Firm Is

question 71

Multiple Choice

Suppose that marginal revenue for a perfectly competitive firm is $20 .When the firm produces 10 units,its marginal cost is $20,its average total cost is $22,and its average variable cost is $17.Then to maximize its profit in the short run,the firm

• A) should stay open and incur an economic loss of $20.
• B) must increase its output to increase its profit.
• C) must decrease its output to increase its profit.
• D) should shut down.
• E) should not change its production because it is already maximizing its profit and is making an economic profit.

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Definitions:

Multinomial Experiment

A statistical experiment that can result in multiple outcomes, where each outcome has a fixed probability of occurring.

Degrees of Freedom

The number of independent values or quantities which can be assigned to a statistical distribution or calculation, essential for determining the preciseness of an estimation or hypothesis test.

Chi-Squared Goodness-Of-Fit Test

A statistical test used to determine if a sample data matches a population with a specific distribution.

More Than Two Categories

A situation or variable that can take on more than two distinct values or classifications.