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If a Firm Is Producing Where Its LMC = Price

Question 43

Multiple Choice

If a firm is producing where its LMC = price and the LMC is equal to LAC, then it would do better in the long run by


A) increasing output with its existing plant until LMC equals price.
B) increasing plant size until LMC and SAC are identical and equal to price.
C) decreasing plant size until LAC, SAC and price are equal.
D) changing nothing because it is already at the long run profit maximizing point.

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