Caskets are produced in a monopolistic competitive market. One producer, Final Boxes, sells 20 caskets a week at a price of $550 each. Its average total cost is $600. From this information, we know that:
A) new casket firms will want to enter.
B) this producer is losing $1,000 a week.
C) this producer is making an economic profit of $500.
D) this producer is setting marginal revenue = marginal cost.
E) this producer should increase production.
Correct Answer:
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