For a competitive firm, which of the following is false?
A)Marginal cost is constant as output changes.
B)Marginal revenue equals price.
C)Profit is maximized when price equals marginal cost.
D)Profit is maximized when marginal revenue equals marginal cost.
E)Producer surplus is zero.

Question

Quizplus · Accepted Answer

E  For a competitive firm, marginal cost is not constant as output changes; it typically increases due to diminishing returns. Producer surplus is not zero; it is the area above the supply curve and below the price level.

For a Competitive Firm, Which of the Following Is False