-Computer memory chips are produced on wafers,each wafer having many separate chips that are separated and sold.The above table shows costs for a perfectly competitive producer of computer memory chips.This firm will produce as long as the market price of a wafer is above
A) $1,300.
B) $1,400.
C) $7,900.
D) $2,800.
E) $9,800.

Question

-Computer memory chips are produced on wafers,each wafer having many separate chips that are separated and sold.The above table shows costs for a perfectly competitive producer of computer memory chips.This firm will produce as long as the market price of a wafer is above
A) $1,300. 
B) $1,400. 
C) $7,900. 
D) $2,800. 
E) $9,800.

Quizplus · Accepted Answer

In a perfectly competitive market, a firm will continue to produce as long as the market price covers the variable costs. The choice that represents the lowest level of costs that must be covered for production to take place is $1,300, which likely represents the total variable costs. Fixed costs do not need to be covered in the short run for production to continue.

-Computer Memory Chips Are Produced on Wafers,each Wafer Having Many