Suppose That When a Perfectly Competitive Firm Produces 1,000 Units

question 142

Multiple Choice

Suppose that when a perfectly competitive firm produces 1,000 units of output, its total variable cost is $1,900. If the marginal cost of producing the 1,000ᵗʰ unit is $1.70, and if the market price of each unit of output is $1.70, then the firm should:

• A)shut down.
• B)raise its price.
• C)increase output.
• D)continue to produce 1000 units.

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