Suppose the Christmas trees market is perfectly competitive.A business owner is currently suffering from a loss of $1,000,the cost of producing and selling an additional Christmas tree is $20,and the current market price is $25.The owner

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In a perfectly competitive market, the business owner should continue to produce as long as the market price is greater than their marginal cost. In this case, the marginal cost of producing an additional tree is $20, and the market price is $25, so the business owner should sell more trees to reduce the loss.

Suppose the Christmas Trees Market Is Perfectly Competitive