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:

Issued

Pertains to securities or other financial instruments that have been created and offered for sale to investors by a corporation or government entity.

Cash Received

The total amount of cash that an entity collects during a specific period, from various sources including sales, financing, or investments.

Bonds

Long-term debt securities issued by corporations or governments to raise capital, promising to pay the bearer a specified amount of interest over a set period until repayment of the principal.

Face Amount

The value of a financial instrument as stated on the instrument itself.