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If Your Firm Is Producing a Good at a Level

Question 105

Multiple Choice

If your firm is producing a good at a level where marginal revenue equals marginal cost, and price is less than average variable cost, then in the short run your firm should


A) shut down and suffer a loss equal to your fixed costs.
B) continue to produce, but increase output.
C) continue to produce the same amount.
D) continue to produce, but decrease output.

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