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In a Perfectly Competitive Industry,the Market Price Is $5

Question 59

Multiple Choice

In a perfectly competitive industry,the market price is $5.An individual firm is producing the level of output where marginal cost is $5 and is increasing,and average total cost is $25.What should the firm do to maximize its economic profit in the short run?


A) shut down
B) expand output
C) contract output
D) leave output unchanged
E) insufficient information to answer

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