A. A perfectly competitive firm MUST be earning a profit when: MR ATC B.In a perfectly competitive market, each firm is a price taker because:

A. A perfectly competitive firm MUST be earning a profit when:

		MR
		P
		P>AVC
		P>ATC

B.In a perfectly competitive market, each firm is a price taker because:

		There are no good substitutes for their goods.
		There are low barriers to entry.
		There are many buyers.
		There are many other firms that produce identical goods.

C.The pursuit of self-interest in a commons where everyone has access to a valuable resource will cause:

		The positive externality to be eliminated
		The common good of society to be realized
		The resource to be overused
		The free-rider problem to be solved

D.Suppose that Salma owns a bakery that sells cakes in a perfectly competitive market. Salma can sell each cake for a price of SR 400. The marginal cost of selling one cake a day is SR 300; the marginal cost of selling a second cake is SR 350; and the marginal cost of selling a third cake is SR 450. To maximize her profit, Salma should sell:

		One cake a day.
		More than three cakes a day.
		Three cakes a day.
		Two cakes a day.