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Compact Discs Are Sold in a Perfectly Competitive Market

Question 42

Multiple Choice

Compact discs are sold in a perfectly competitive market. The current market price of compact discs is $15. If at the current level of production of compact discs you calculate the marginal cost to your company is also $15, and that AVC is rising, in the short run your company should


A) produce more compact discs.
B) produce fewer compact discs.
C) continue producing the current level of compact discs.
D) raise the price of its compact discs.

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