A Competitive Firm Operating in the Short Run Is Maximizing

question 161

Multiple Choice

A competitive firm operating in the short run is maximizing profits and just breaking even.Its costs include a monthly state license fee of $100 that must be paid for as long as the firm operates.If the license fee is raised to $150,what should the firm do to maximize profits in the short run?

• A)increase price
• B)increase output
• C)reduce output
• D)not change output

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