Author Question: A firm in a perfectly competitive industry will maximize profits by adjusting (Read 149 times)

blinding37 · **on:** Oct 12, 2022

Question 1

Consider a perfectly competitive firm producing and selling mousetraps at a market price of $5.00. Suppose this firm is currently selling 1750 mousetraps at the market price of $5. If the firm raises its price to $6, its average revenue will be
◦ $5.
◦ $0.
◦ greater than $6.
◦ between $5 and $6.
◦ $6.

Question 2

A firm in a perfectly competitive industry will maximize profits by adjusting
◦ average total cost until it equals price.
◦ price until average revenue equals average total cost.
◦ price until marginal revenue equals marginal cost.
◦ output until average revenue equals short-run average total cost.
◦ output until marginal cost equals marginal revenue.

dsd1212 · **Reply #1 on:** Oct 12, 2022

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