Refer to the data provided in Table 9.4 below to answer the question(s) that follow.
Table 9.4qTFCTVCTCMCAVCATC0$100 $0$100 ---- -- 11004014040 40 140 21006016020 30 80 31009019030 30 63.334100124 224 343156 5100180 280 56 36 56 6100 264 364 84 44 60.677100 372 472 108 53.14 67.42Refer to Table 9.4. The market price is $84 and this firm is producing four units of output. Which of the following would you recommend to this firm?
A. Reduce price to $34, so that marginal cost will equal marginal revenue at 4 units of output.
B. Increase output to seven units so that price is less than marginal cost.
C. Increase output to six units, so that marginal cost equals marginal revenue.
D. Continue producing four units of output, because the firm is able to make an economic profit.
Answer: C
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b. downward sloping and above the marginal revenue curve. c. downward sloping and below the marginal revenue curve. d. kinked because of recognized interdependence with other firms.
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A. The advent of E-commerce, which has added a new layer of competition B. The rise of huge discounters, such as Wal-Mart and Staples C. The rising tide of imported goods D. All of the choices are correct