Asked by Henriette Uwimbabazi on Jun 23, 2024
Verified
If a competitive firm is selling 900 units of its product at a price of $10 per unit and earning a positive profit, then
A) its total cost is more than $9,000.
B) its marginal revenue is less than $10.
C) its average total cost is less than $10.
D) the firm cannot be a competitive firm because competitive firms cannot earn positive profits.
Competitive Firm
A company that operates in a market with many buyers and sellers, where each has a negligible effect on the market price.
Average Total Cost
The cost per unit of output, calculated by dividing the total production cost by the quantity of output produced.
Marginal Revenue
The supplementary earnings acquired from selling an extra unit of a product or service.
- Capability to examine the connection between marginal revenue and overall revenue.
- Understanding the circumstances that lead businesses to enter or leave the market, considering their analysis of profits and costs.
Verified Answer
Learning Objectives
- Capability to examine the connection between marginal revenue and overall revenue.
- Understanding the circumstances that lead businesses to enter or leave the market, considering their analysis of profits and costs.
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