If the Market Price Is $50 for a Unit of a Good

question 256

Multiple Choice

If the market price is $50 for a unit of a good produced in a perfectly competitive market and the firm's minimum average variable cost is $52,then to maximize its profit (or minimize its loss) the firm should

• A) definitely produce the unit.
• B) shut down.
• C) not produce the unit but remain open.
• D) not produce the unit. Whether the firm should shut down or remain open cannot be determined without more information.
• E) produce the unit only if the price exceeds the average fixed cost.

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Definitions:

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A term describing where two different elements or segments meet, often used in the context of networking, railways, or diagrammatic representations.

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