The equilibrium price of a guidebook is $35 in the perfectly competitive guidebook industry.Our firm produces 10 000 guidebooks for an average total cost of $38,a marginal cost of $30,and an average variable cost of $30.Our firm,in the short run,should:
A) raise the price of guidebooks because the firm is losing money.
B) keep output the same because the firm is producing at a minimum average variable cost.
C) produce more guidebooks because the next guidebook produced will increase profit by $5.
D) shut down because the firm is losing money.
Correct Answer:
Verified
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