Shama Is Producing Candles in a Perfectly Competitive Market

question 257

Multiple Choice

Shama is producing candles in a perfectly competitive market.When she produces 500 candles,her total cost is $250.If she produces one additional candle,her total cost increases to $260.In order to maximize her profit,she should produce the additional candle

• A) if the market price for a candle is $12.
• B) only if the market price exceeds $260 for a candle.
• C) only if the market price exceeds $250 for a candle.
• D) if the market price for a candle exceeds $0.50.
• E) if her price exceeds her average total cost.

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Definitions:

Marginally Attached Workers

Individuals not in the labor force who want and are available to work but have not searched for a job in the past 4 weeks, hence are not counted as unemployed in labor force statistics.

Economic Reasons

Factors or motivations grounded in economics that explain certain behaviors, decisions, or trends.

Interest Rate

The percentage charged by a lender to a borrower for the use of assets, expressed as a percentage of the principal.

Project Cost

The total financial expenditure incurred in the planning, execution, and completion of a project.