Suppose That in a Perfectly Competitive Industry,the Market Price for the Product

question 32

Multiple Choice

Suppose that in a perfectly competitive industry,the market price for the product is $130.A firm is producing the output level at which average total cost equals marginal cost,both of which are $138.Average variable cost is $132.To maximize profits in the short run,the firm should

• A)reduce its output.
• B)expand its output.
• C)leave its output unchanged.
• D)produce zero output.
• E)change the price of the product.

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Definitions:

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An organism that lives inside the body or a cell of another kind of organism. Endosymbionts may benefit their host (mutualism) or harm their host (parasitism).

Parabasilid

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A series of striking white chalk cliffs located along the southeastern coastline of England, notable for their geological significance and scenic beauty.