Assume a Perfectly Competitive Firm Is Producing a Level of Output

question 25

Multiple Choice

Assume a perfectly competitive firm is producing a level of output at which MR < MC.What should the firm do to maximize its profits?

• A)The firm should do nothing - it wants to maximize the difference between MR and MC in order to maximize its profits.
• B)The firm should decrease output.
• C)The firm should increase price.
• D)The firm should increase output.