Equilibrium Price Is $25 in a Perfectly Competitive Market

question 137

Multiple Choice

Equilibrium price is $25 in a perfectly competitive market. For a perfectly competitive firm, MR = MC at 2,000 units of output. At 2,000 units, ATC is $33, and AVC is $27. The best policy for this firm is to __________ in the short run. Also, total fixed cost equals __________ and total variable cost equals __________ for this firm.

• A)continue to produce; $12,000; $54,000
• B)shut down; $12,000; $54,000
• C)shut down; $66,000; $54,000
• D)continue to produce; $150; $1,500
• E)There is not enough information to answer all parts of the question.

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