A Competitive Firm Is Choosing an Output Level to Maximize

question 4

Multiple Choice

A competitive firm is choosing an output level to maximize its profits in the short run.Which of the following is not necessarily true? (Assume that marginal cost is not constant and is well defined at all levels of output.)

• A)Marginal cost is at least as large as average variable cost.
• B)Total revenues are at least as large as total costs.
• C)Price is at least as large as average variable cost.
• D)Price equals marginal cost.
• E)The marginal cost curve is rising.

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Definitions:

Variability

The degree to which scores in a set of data spread out or differ from each other.

Range

The range is calculated by subtracting the smallest value from the largest value in a set of data.

Interquartile Range

A measure of variability, calculated by subtracting the first quartile from the third quartile of a data set.

Mean

The average value of a set of numbers, calculated by dividing the sum of all the numbers by the count of numbers.