Post Utme Nile University 2025 Economics Question 6

Practice objective / multiple choice question 6 from the 2025 Post Utme Nile University Economics examination.

Post Utme Nile University 2025 Economics Objective / Multiple Choice
Question 6 POST_UTME_NILE_UNIVERSITY • 2025 • ECONOMICS • objective
Post Utme Nile University 2025 Economics Question 6 diagram

Consider a firm operating in a perfectly competitive market with a downward-sloping demand curve. If the firm's marginal revenue (MR) curve intersects its average variable \cost (AVC) curve at point E, where MR = AVC, and the firm's marginal \cost (MC) curve is initially below the AVC curve, what is the effect on the firm's profit-maximizing output level?

Answer Options

A. The firm will increase its profit-maximizing output level.
Correct Answer B. The firm will decrease its profit-maximizing output level.
C. The firm's profit-maximizing output level will remain unchanged.
D. The firm will experience a loss.
Correct Answer
B
Correct Option:
The firm will decrease its profit-maximizing output level.

About This Question

This is Post Utme Nile University 2025 Economics Question 6. It is one of the objective questions from the 2025 Post Utme Nile University Economics examination.

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