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.

---

Definitions:

Construct

To build or assemble something complex from various parts or concepts.

Moral Judgment

The ability to discern the right or wrong of actions or decisions based on ethical principles.

Six Stages

A framework often used in business, project development, or personal growth, detailing a series of phases or levels typically encountered from start to completion.

Fog of War

The uncertainty faced by participants in military operations, often applicable by analogy to situations of confusion or ambiguity in business and strategy.