A Firm Operating in a Perfectly Competitive Market Finds Itself

question 64

Multiple Choice

A firm operating in a perfectly competitive market finds itself producing a level of output for which marginal revenue is less than marginal cost. In order to maximize profits (or minimize losses) , the firm should

• A)increase its level of output.
• B)decrease its level of output.
• C)shut down operations.
• D)lower its price.
• E)raise its price.