Widgets R Us,which Is a Price-Taking Firm,is Currently Producing 250

question 84

Multiple Choice

Widgets R Us,which is a price-taking firm,is currently producing 250 units of output.The market price is $3 per unit,the marginal cost of the 250th unit is $2.75,average total cost is $3.50 per unit,and average variable cost is $2.50 per unit.What advice should you give Widgets R Us?

• A)Increase output to reduce losses.
• B)Continue to produce 250 units in the short run.
• C)Shut down to minimize losses.
• D)Decrease output to 200 units.