Which of the following statements is true?
A) The total cost of production in a perfectly competitive market can be minimized only when the marginal costs across firms in the market are different.
B) When a competitive market is allowed to operate efficiently, firms end up producing goods using the least amount of scarce resources.
C) Under a perfectly competitive framework, a ruling authority is essentially required to dictate goals for the betterment of society.
D) A firm interested in maximizing profits in a perfectly competitive market will produce output at a level where marginal revenue is equal to the price and greater than the marginal cost.

Question

Quizplus · Accepted Answer

In a competitive market, firms are forced to produce goods at the lowest possible cost in order to remain competitive. This means using the least amount of scarce resources possible. The other statements are false. A) In a perfectly competitive market, firms have the same marginal cost. B) A ruling authority is not required to dictate goals in a perfectly competitive market because firms operate based on their self-interest. D) A firm interested in maximizing profits in a perfectly competitive market will produce output where marginal cost is equal to the price.

Which of the Following Statements Is True