If a Firm Is Producing Where Its LMC = Price

question 21

Multiple Choice

If a firm is producing where its LMC = price and the LMC is equal to LAC, then it would do better in the long run by

• A)increasing output with its existing plant until LMC equals price.
• B)increasing plant size until LMC and SAC are identical and equal to price.
• C)decreasing plant size until LAC, SAC and price are equal.
• D)changing nothing because it is already at the long run profit maximizing point.

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