Multiple Choice
A firm sells a product in a purely competitive market.The marginal cost of the product at the current output is $3.00 and the market price is $2.50.What should the firm do?
A) Shut down if the minimum possible average variable cost is $2.00.
B) Increase output if the minimum possible average variable cost is $2.00.
C) Increase output if the minimum possible average variable cost is $2.50.
D) Decrease output if the minimum possible average variable cost is $2.00.
Correct Answer:
Verified
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