Consider a perfectly competitive firm in the following position: output = 4000 units,market price = $1,fixed costs = $2000,variable costs = $2000,and marginal cost = $1.To maximize profits the firm should

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In a perfectly competitive market, firms maximize profit where marginal cost equals marginal revenue (price). Here, the marginal cost is equal to the market price ($1), so the firm is already maximizing profit and should not change its output.

Consider a Perfectly Competitive Firm in the Following Position: Output