1. The output that maximizes profit is obtained where :

A) marginal benefit exceeds marginal cost by the greatest amount.

B) total benefit exceeds total cost by the greatest amount.

C) marginal benefit equals marginal cost.

D) total benefit exceeds total cost by the greatest amount and when marginal benefit equals marginal cost.

2. Perfect competition is characterized by:

A) rivalry in advertising.

B) fierce quality competition.

C) the inability of any one firm to influence price.

D) widely recognized brands.

3. If price is greater than average total cost at the profit-maximizing quantity of output in the short run, a perfectly competitive firm will:

A) produce at a loss.

B) produce at a profit.

C) shut down production.

D) produce more than the profit-maximizing quantity.