If a Perfectly Competitive Firm Can Sell a Bushel of Soybeans

question 38

Multiple Choice

If a perfectly competitive firm can sell a bushel of soybeans for $25 per bushel, has an average variable cost of $20 per bushel, and the marginal cost is $22 per bushel, the profit-maximizing firm should

• A) expand output.
• B) reduce output.
• C) increase price.
• D) continue to produce at its current level of output.