A perfectly competitive firm is producing a good at a level where P = $90 and MC = $90. The firm will continue to produce as long as

Question

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The firm will continue to produce as long as P is greater than or equal to AVC. Since P is $90 and MC is $90, we know that the firm's AVC must be less than $90, as producing at a level where AVC is greater than P would mean the firm is losing money on each unit produced. Therefore, the best choice is A.

A Perfectly Competitive Firm Is Producing a Good at a Level