Suppose Your Firm Is Operating in a Perfectly Competitive Market

question 120

Multiple Choice

Suppose your firm is operating in a perfectly competitive market, and that the minimum average variable cost of producing your good is $30. If the price of the good is $32, your firm should

• A) not produce anything since the price is above the minimum of average variable cost.
• B) not consider price when determining the amount to sell.
• C) supply the amount of the good where the marginal cost of production is equal to $32.
• D) supply the amount of the good where the marginal cost of production is $30.