Suppose a perfectly competitive firm is producing 1,000 units of output and the marginal cost of the 1,000th unit is $7. If the firm can sell each unit of output for $7 and the firm's revenue is sufficient to cover its variable cost, the firm should:

A. leave production unchanged.
B. decrease production to lower losses.
C. increase price to increase profits.
D. increase production to increase profits.


Answer: A

Economics

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