Assume a Perfectly Competitive Firm Sells Its Output for $150

question 89

Multiple Choice

Assume a perfectly competitive firm sells its output for $150 per unit.At its current 2,000 units of output,marginal cost is $180 and increasing,and average variable cost is $160.Assuming it wants to maximize its profits,it should:

• A) increase output.
• B) decrease output, but not shut down.
• C) maintain its current output rate.
• D) shut down.

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