A perfectly competitive firm is producing at an output at which marginal revenue is equal to marginal cost. At this level of output, the price is less than average total cost but greater than average variable cost. In the short run, the firm should: shut down. exit the industry. produce more. produce less. produce at the current level of output. If nothing changes, in the long run, the firm should: produce at the current level of output. produce more. exit the industry. shut down. produce less.

A perfectly competitive firm is producing at an output at which marginal revenue is equal to marginal cost. At this level of output, the price is less than average total cost but greater than average variable cost. In the short run, the firm should: shut down. exit the industry. produce more. produce less. produce at the current level of output. If nothing changes, in the long run, the firm should: produce at the current level of output. produce more. exit the industry. shut down. produce less.

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

Chapter9: Market Structure And Long-run Equilibrium

Section: Chapter Questions

Problem 7MC

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