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A profit-maximizing firm in a perfectly competitive market that is facing a price of $10 decides...

A profit-maximizing firm in a perfectly competitive market that is facing a price of $10 decides to produce 100 widgets. This results in an economic profit of $80. If the marginal cost of producing the 100th widget was $12 then this firm should:

produce less than 100
set the price at $12
produce more than 100
continue producing 100

Which of the following is true for the firm in a perfectly competitive industry?

There are no pricing decisions to be made by the firm
The firm has complete control over the price that it will charge
Each seller is relatively large compared to the market
The products supplied by the firms are differentiated
The demand curve slopes downward
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Answer #1

A profit-maximizing firm in a perfectly competitive market that is facing a price of $10 decides to produce 100 widgets. This results in an economic profit of $80. If the marginal cost of producing the 100th widget was $12 then this firm should

Correct Answer:- produce less than 100

Reason:- The price is more than he cost thus it should produce less than 100 widget

Which of the following is true for the firm in a perfectly competitive industry?

Correct Answer:- The demand curve slopes downward

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