1. Firm X is producing the quantity of output at which marginal revenue equals marginal cost....

1. Firm X is producing the quantity of output at which marginal revenue equals marginal cost. It is earning

A. a positive economic profit.

B. an economic loss.

C. a normal profit.

D,There is not enough information to answer the question.

2. A perfectly competitive firm will always maximize short-run profits by producing the level of output where the average total cost is minimized.

A.True

B.False

Expert Solution

1. Option D

Explanation: A firm maximizes profit when tbe marginal cost equals the marginal revenue. However, whether the maximized profit is normal profit or above normal profit depends on the type of the firm.

2. False

Explanation: A perfectly competitive firm maximizes profit when marginal revenue equals marginal cost.

Rahul Sunny answered 2 years ago

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