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If a Perfectly Competitive Firm Is Maximizing Profits and Is

Question 39

Multiple Choice

If a perfectly competitive firm is maximizing profits and is currently producing at the point where price is $24, marginal cost is $24, and average total cost is $20, then the firm can expect that


A) it will have to shut down soon.
B) its average total cost will increase until it is just breaking even.
C) more firms will enter the industry, and the price will decline.
D) its level of accounting profit will be below the normal rate of return.

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