A perfectly competitive firm is in the following situation: output = 6000 units; market price = $2; total fixed cost = $7000; total variable cost = $6000; marginal cost =$3. This firm should do which of the following: reduce output but not shut down to maximize short-run profit. increase output to maximize profit. not change output since profit is already maximized. shut down immediately. raise price above $3 to maximize profits.
A perfectly competitive firm is in the following situation: output = 6000 units; market price = $2; total fixed cost = $7000; total variable cost = $6000; marginal cost =$3. This firm should do which of the following: reduce output but not shut down to maximize short-run profit. increase output to maximize profit. not change output since profit is already maximized. shut down immediately. raise price above $3 to maximize profits.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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- reduce output but not shut down to maximize short-run profit.
- increase output to maximize profit.
- not change output since profit is already maximized.
- shut down immediately.
- raise price above $3 to maximize profits.
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