Asked on 7 Aug 2018

13. A perfectly competitive firm is producing 700 units of output in a market where the price is $50 per unit. At this output, TC= $40,000 and TVC= $30,000. The firm is currently producing a level of output where MC is $20 per unit. This output level maximizes the difference between market price and MC. Using only this information, and assuming this firm wants to maximize total profits, we can conclude that A. В. this fimm should increase output. this firm should decrease output. this fimm is producing the output level that maximizes output. this firm should shut down. D.

Answered on 7 Aug 2018

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