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A Perfectly Competitive Firm Is Earning an Economic Profit When

Question 71

Multiple Choice

A perfectly competitive firm is earning an economic profit when total fixed costs increase.Assuming the firm does not shut down,in the short run the firm will


A) charge a higher price.
B) produce more output so the extra revenue will cover the increased costs.
C) produce less output to decrease total costs.
D) continue producing the same quantity as before but will make less economic profit.
E) continue producing the same quantity as before and continue making the same economic profit as before.

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