Suppose product price is $24; MR = MC at Q = 200; AFC = $6; AVC = $16 . What do you advise this competitive price-taker firm to do?

a. Increase output.
b. Decrease output.
c. Shut down operations.
d. Stay at the current output; the firm is earning a profit of $400.
e. Stay at the current output even though the firm is losing $200.


A

Economics

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