Consider a perfectly competitive firm in the following position: output = 4000, market price = $1, total fixed costs = $2000, total variable costs = $4500, and marginal cost = $1. To maximise profits, the firm should... a. Produce zero output. b. Increase the market price. c. Not change its output. d. None of the other options are correct. e. Expand its output.

Consider a perfectly competitive firm in the following position: output = 4000, market price = $1, total fixed costs = $2000, total variable costs = $4500, and marginal cost = $1. To maximise profits, the firm should... a. Produce zero output. b. Increase the market price. c. Not change its output. d. None of the other options are correct. e. Expand its output.

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter5: Investment Decisions: Look Ahead And Reason Back

Section: Chapter Questions

Problem 5.7IP

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