At an Output Level of 500 Units, ATC = $10

question 17

Multiple Choice

At an output level of 500 units, ATC = $10, AVC = $5, MR = $3 and MC = $3, the result for the perfectly competitive firm will be:

• A) making a loss of ($5 - $3) 500 = $1000.
• B) a decrease in output, so MC > MR.
• C) making a short-run loss of $2500.
• D) an increased output, so MR > MC.

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