Asked by
Al Haitham Al Mabsali
on Oct 27, 2024
Verified
A perfectly competitive firm will earn a profit and will continue producing the profit-maximizing quantity of output in the short run if the price is:
A) less than the average fixed cost.
B) less than marginal cost.
C) greater than average variable cost but less than average total cost.
D) greater than average total cost.
Average Variable Cost
The total variable cost divided by the quantity of output produced; it measures the variable cost per unit of output.
Average Total Cost
The per unit cost of production, calculated by dividing the total costs by the quantity of output produced.
Profit-maximizing
A strategy or point at which a business makes the greatest financial gain, where marginal revenue equals marginal cost.
- Identify the short-term production strategies of a perfectly competitive entity through evaluating price against average total cost, marginal cost, and average variable cost.
Verified Answer
DS
Learning Objectives
- Identify the short-term production strategies of a perfectly competitive entity through evaluating price against average total cost, marginal cost, and average variable cost.