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A Firm in Monopolistically Competitive Market Is Producing 30 Units

Question 108

Multiple Choice

A firm in monopolistically competitive market is producing 30 units of output.At this level of production, the firm charges $50 per unit.Its marginal cost is $24 and marginal revenue is $24, and average cost is $20 per unit.Given this information, this firm should


A) maintain its current output, since it is maximizing profits.
B) decrease output to increase profits.
C) increase output to increase profits.
D) shut down.

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