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klemol [59]
3 years ago
9

A perfectly competitive firm will maximize profit or minimize losses in the short run by producing at the point where:

Business
1 answer:
Marina CMI [18]3 years ago
6 0

Answer:

The correct answer is option C.

Explanation:

A perfectly competitive firm faces a horizontal line demand curve at the market-determined price. This demand curve also represents average revenue and marginal revenue.  

The firm is able to maximize profits or minimize loss at the point where the marginal cost is equal to the price or marginal revenue and the price is such that the average fixed cost is being covered.  

In the short run, some costs are fixed while others are variables, a firm is able to minimize losses if the price is greater than AFC. But in the long run, all costs are variable so price should be either higher than or equal to ATC to maximize profits and minimize losses.

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Banks use a large percentage of their checkable deposits for the purpose of __________.
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B. giving loans

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When aggregate demand is high enough to drive unemployment below the natural rate:_________
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Answer:

e. there is downward pressure on the price level, and the government may want to conduct expansionary fiscal policy.

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This results in the upward movement in terms of pressure on the aggregate demand that leads to a rise in the level of price and the real GDP also rises which reduced the unemployment

But when the aggregate demand is less so there is a downward pressure on the price as the level of price declines so that the aggregate demand increased and it is requirement made by the government for an  expansionary fiscal policy that give increased in government spending or taxes decreased in order to raise the aggregate demand

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