Consider a firm operating in a perfectly competitive market. At its current output of 200 units, marginal revenue is $28 . At this output, average total cost is minimized and equals $25 . Given this information, what should the firm do?
a. Continue to produce 200 units, since costs per unit are minimized
b. Increase output beyond 200 units, since this higher output will yield the profit maximizing output level.
c. Decrease output below 200 units, since this lower output will result in the profit maximizing output level.
d. More information is needed to determine the firm's next step.
b
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A. over 60 percent of total income. B. over 70 percent of total income. C. just under 50 percent of total income. D. just under 40 percent of total income.
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Indicate whether the statement is true or false
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