Karlos Sells His Product for $40 Each in a Competitive

question 11

Multiple Choice

Karlos sells his product for $40 each in a competitive price-taker market. At his present rate of output, his marginal cost is $39, average variable cost is $25, and average total cost is $45. To improve his profit/loss situation, Karlos should

• A) increase output
• B) reduce output but not to zero
• C) maintain the present rate of output
• D) shut down
• E) raise the price