If a Perfectly Competitive Firm Finds That the Price Exceeds

question 122

Multiple Choice

If a perfectly competitive firm finds that the price exceeds its ATC,then the firm

• A) will raise its price to increase its economic profit.
• B) will lower its price to increase its economic profit.
• C) is making an economic profit.
• D) is incurring an economic loss.
• E) is making zero economic profit.

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Definitions:

Reward Theory

A theory suggesting that people are motivated by rewards, whether tangible or intangible, and that these rewards encourage specific behaviors.

Attitudes

A settled way of thinking or feeling about someone or something, typically reflected in a person's behavior.

Predict Behavior

The process of forecasting an individual's actions based on past behavior, current conditions, or psychological theory.

Certain Conditions

A phrase often used to specify that something is subject to one or more unspecified limitations or requirements.