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If a Perfectly Competitive Firm Is Producing Where Its MR=MC,but

Question 151

Multiple Choice

If a perfectly competitive firm is producing where its MR=MC,but is operating to the left of the minimum point of its LRAC curve,


A) it cannot be optimizing its short-run behaviour.
B) it can reduce its average costs by building a larger plant.
C) it can still be in long-run equilibrium as long as P = SRATC.
D) its profits will decrease if it builds a larger plant.
E) it is in a long-run profit maximizing position.

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