Claude's Copper Clappers sells clappers for $60 each in a perfectly competitive market.At its present rate of output, Claude's marginal cost is $65, average variable cost is $25, and average total cost is $62.To improve his profit/loss situation, Claude should

Question

Quizplus · Accepted Answer

Claude should reduce output because the marginal cost ($65) is greater than the price ($60), indicating that producing additional units is not profitable. However, since the price is above the average variable cost ($25), he should not shut down immediately.

Claude's Copper Clappers Sells Clappers for $60 Each in a Perfectly