[amp_mcq option1=”Both (A) and (R) are true” option2=”Both (A) and (R) are false” option3=”(A) is false, but (R) is true” option4=”(A) is true, but (R) is not a correct explanation of (A)” correct=”option4″]<\/p>\n
The correct answer is: D. (A) is true, but (R) is not a correct explanation of (A)<\/strong><\/p>\n A perfectly competitive firm is a price taker, which means that it has no control over the price of its product. The price is determined by the market, and the firm must accept the prevailing price in order to sell its product.<\/p>\n The firm is interested in deciding the level of output only because it is the only variable that it can control. The price is determined by the market, and the firm cannot change it. Therefore, the firm must decide how much output to produce in order to maximize its profits.<\/p>\n The reason (R) is not a correct explanation of the assertion (A) because the firm is interested in deciding the level of output only because it is the only variable that it can control, not because it is a price taker.<\/p>\n Here is a more detailed explanation of each option:<\/p>\n [amp_mcq option1=”Both (A) and (R) are true” option2=”Both (A) and (R) are false” option3=”(A) is false, but (R) is true” option4=”(A) is true, but (R) is not a correct explanation of (A)” correct=”option4″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"class_list":["post-44308","post","type-post","status-publish","format-standard","hentry","category-economics","no-featured-image-padding"],"yoast_head":"\n\n