Asked by
Lewis Brooks
on Oct 12, 2024
Verified
Which statement is false?
A) A profit-maximizing perfectly competitive firm will increase production when price exceeds marginal cost.
B) The lowest point on a perfectly competitive firm's short-run supply curve is at the shutdown point.
C) A perfectly competitive firm will operate at that output where MC equals MR only when it is minimizing losses.
D) A profit-maximizing perfectly competitive firm will decrease production when marginal cost exceeds price.
Marginal Cost
The added expense resulting from creating one more unit of a good or service.
Marginal Revenue
The additional income from selling one more unit of a good or service.
Short-run Supply Curve
A graphical representation showing the quantity of goods a firm is willing and able to supply at different prices over a short period, assuming some inputs are fixed.
- Understand the concept of perfect competition and the behavior of firms within such market structures.
- Explain how price, marginal cost, marginal revenue, and average total cost interact to influence firm decisions in perfect competition.
Verified Answer
UM
Learning Objectives
- Understand the concept of perfect competition and the behavior of firms within such market structures.
- Explain how price, marginal cost, marginal revenue, and average total cost interact to influence firm decisions in perfect competition.