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A Company Finds That at the MR = MC Output

Question 21

Multiple Choice

A company finds that at the MR = MC output level, its total cost is $500, total variable cost is $400, and total revenue is $450. Your advice to the firm is to


A) shut down immediately.
B) reduce output to reduce the cost of production.
C) increase output to reduce the per unit cost of production.
D) continue to produce, as total revenue covers total variable cost.

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