1. If a perfectly competitive firm finds that the price exceeds its

ATC?,

then the firm

A.

is earning an economic profit.

B.

will lower its price to increase its economic profit.

C.

is earning zero economic profit.

D.

will raise its price to increase its economic profit.

E.

is incurring an economic loss.

2.

For a perfectly competitive? firm, marginal revenue is

A.

equal to the change in profit from selling one more unit.

B.

undefined because the? firm's demand curve is horizontal.

C.

greater than the price.

D.

equal to the price.

E.

less than the price.