[amp_mcq option1=”Optimum Firm” option2=”Equilibrium Firm” option3=”Representative Firm” option4=”Marginal Firm” correct=”option1″]<\/p>\n
The correct answer is A. Optimum Firm.<\/p>\n
An optimum firm is a firm that has found the least cost combination of inputs to produce a given level of output. This means that the firm is producing at the point where its marginal cost equals its average cost.<\/p>\n
A firm’s marginal cost is the additional cost incurred by producing one more unit of output. A firm’s average cost is the total cost of production divided by the number of units produced.<\/p>\n
A firm will always produce at the point where its marginal cost equals its average cost. This is because if the firm produces at a point where its marginal cost is greater than its average cost, then it is incurring more cost per unit of output than it needs to. On the other hand, if the firm produces at a point where its marginal cost is less than its average cost, then it is not producing enough output to minimize its costs.<\/p>\n
Therefore, the optimum firm is the firm that produces at the point where its marginal cost equals its average cost. This is the point at which the firm is producing at the least cost combination of inputs.<\/p>\n
The other options are incorrect because they do not refer to a firm that has found the least cost combination of inputs to produce a given level of output.<\/p>\n
Option B, Equilibrium Firm, refers to a firm that is producing at the point where its demand curve intersects its supply curve. This is the point at which the firm is maximizing its profits.<\/p>\n
Option C, Representative Firm, refers to a firm that is representative of all firms in an industry. This means that the firm has the same cost structure and production technology as other firms in the industry.<\/p>\n
Option D, Marginal Firm, refers to a firm that is on the margin of profitability. This means that the firm is just breaking even.<\/p>\n","protected":false},"excerpt":{"rendered":"
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