If there is perfect certainty, a competitive firm will necessarily
A)seek to maximize its immediate profits rather than long-run returns because otherwise it will go broke.
B)maximize the ratio of the present value of its sales to the present value of its costs.
C)equalize its profits in all periods.
D)equalize its sales in all periods.
E)None of the above.

Question

Quizplus · Accepted Answer

In a situation of perfect certainty, a competitive firm will aim to maximize its profits over the relevant time period, which could involve balancing immediate profits with long-run returns, and not necessarily equalizing profits or sales across periods. The options provided do not accurately describe the behavior of a competitive firm under perfect certainty, hence none of the given choices are correct.

If There Is Perfect Certainty, a Competitive Firm Will Necessarily