-As a perfectly competitive firm produces more and more of a good,its economic profit
A) constantly increases.
B) constantly decreases.
C) first decreases, then increases.
D) first increases, then decreases.
E) does not change.

Question

-As a perfectly competitive firm produces more and more of a good,its economic profit
A) constantly increases. 
B) constantly decreases. 
C) first decreases, then increases. 
D) first increases, then decreases. 
E) does not change.

Quizplus · Accepted Answer

In a perfectly competitive market, as a firm increases production, it initially benefits from economies of scale, leading to increased profits. However, as production continues to increase, diseconomies of scale and increased competition can lead to decreased profits.

-As a Perfectly Competitive Firm Produces More and More of a Good,its