A firm sells a product in a purely competitive market. The marginal cost of the product at the current output of 500 units is $1.50. The minimum possible average variable cost is $1.00. The market price of the product is $1.25. To maximize profit or minimize losses, the firm should:
A. produce less than 500 units.
B. shut down.
C. continue producing 500 units.
D. produce more than 500 units.
Answer: A
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