By Setting MR = MC,a Competitive Firm Decides to Sell

question 59

Multiple Choice

By setting MR = MC,a competitive firm decides to sell 100 units when the market price is $20.The average cost of producing the 100 units is $18 per unit.If the firm has fixed costs of $500,then the firm should

• A) shutdown
• B) expand production
• C) exit the industry
• D) increase their price

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Definitions:

Entrepreneurship

The process of designing, launching, and running a new business, typically starting as a small business, such as a startup.

Social Enterprise

organizations that operate commercially to address social problems, combining business practices with social objectives.

Philanthropic

Pertaining to the act of giving money, time, or effort to support a cause or mission that benefits society, often without financial or material return to the giver.

Commercial

Pertains to commerce or business activity in general; often used to describe advertisements on television or radio.