Asked by
Ravinder Singh
on Dec 12, 2024
Verified
A competitive price-searcher firm is currently producing 10 units of output. At this level of output the firm is charging a price equal to $10, has marginal revenue equal to $6, has marginal cost equal to $6, and has average total cost equal to $12. From this information we can conclude that
A) the firm is currently maximizing its profit.
B) the profits of the firm are positive.
C) firms are likely to enter this market in the long run.
D) the firm would earn more profit by expanding output
Marginal Revenue
The additional income that a firm receives from selling one more unit of a good or service.
Average Total Cost
The sum of all production costs (fixed and variable) divided by the quantity of output, indicating the per-unit cost of production.
Market Entry
The method or approach used by a business to penetrate a new industry or market.
- Acquire knowledge on the long-run balance in competitive markets and the function of economic profits.
Verified Answer
JM
Learning Objectives
- Acquire knowledge on the long-run balance in competitive markets and the function of economic profits.
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