In a competitive industry the market-determined price is $12.A firm is currently producing 50 units of output; average total cost is $10,marginal cost is $15,and average variable cost is $7.In order to maximize profit,the firm should:

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The firm is currently producing at a level where marginal cost ($15) is higher than market price ($12), which means they are not maximizing profit. To maximize profit, the firm should produce where marginal cost equals marginal revenue (which is equal to the price in a competitive market), or in other words, where the next unit of output adds to profit. In this case, producing one more unit would decrease profit ($12 revenue - $15 cost), so the firm should produce less than 50 units. The fact that the average total cost is $10 and average variable cost is $7 are not relevant for this decision.

In a Competitive Industry the Market-Determined Price Is $12