Multiple Choice
A firm sells a product in a purely competitive market.The marginal cost of the product at the current output of 500 units is $1.50.The minimum possible average variable cost is $1.00.The market price of the product is $1.25.To maximize profit or minimize losses,the firm should:
A) continue producing 500 units.
B) produce less than 500 units.
C) produce more than 500 units.
D) shut down.
Correct Answer:
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