Suppose ABC Corp.is a firm producing newsprint in a perfectly competitive industry.Its output is 1500 tonnes per month,the marginal cost of the last tonne produced is $710,and the average revenue per tonne is $620.In the short run,this firm should
A) reduce output.
B) increase output until average revenue is equal to marginal cost.
C) increase output until marginal revenue is equal to marginal cost.
D) definitely shut down.
E) The price of the product is not known,so it is not possible to determine.
Correct Answer:
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