Suppose that when a perfectly competitive firm produces 1,000 units of output, its total variable cost is $1,900. If the marginal cost of producing the 1,000th unit is $1.70, and if the market price of each unit of output is $1.70, then the firm should:
A. raise its price.
B. continue to produce 1000 units.
C. shut down.
D. increase output.
Answer: C
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