Suppose Product Price Is $24; MR = MC at Q

question 246

Multiple Choice

Suppose product price is $24; MR = MC at Q = 200; AFC = $6; AVC = $16. What do you advise this competitive price-taker firm to do?

• A) Increase output.
• B) Decrease output.
• C) Shut down operations.
• D) Stay at the current output; the firm is earning a profit of $400.
• E) Stay at the current output even though the firm is losing $200.

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