If a Perfectly Competitive Wheat Farmer Is Maximizing Its Profit

question 138

Multiple Choice

If a perfectly competitive wheat farmer is maximizing its profit and then increases its output,the farmer's

• A) total revenue increases, but total cost rises by more so that the farmer's total profit decreases.
• B) total revenue decreases and total cost increases, both thereby decreasing the farmer's total profit.
• C) total revenue does not change but total cost increases, thereby decreasing the farmer's total profit.
• D) marginal revenue increases, but so does marginal cost, so that the farmer's total profit increases.
• E) total revenue and total cost both rise, but the effect on the farmer's total profit is uncertain.

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Definitions:

Punishment

A consequence applied to reduce the likelihood of a behavior reoccurring, often seen as negative or undesirable.

Superstitious Behavior

Actions linked to beliefs in supernatural causality, where an event causes an effect without any natural process linking the two.

Skinner

B.F. Skinner was an American psychologist best known for his work in behaviorism and the development of the theory of operant conditioning.

Reinforcement

A concept in behavioral psychology where a behavior is strengthened or increased by following it with a positive outcome or reward.