A Local Business Sells Its Product for $40 Each in a Competitive

Multiple Choice

A local business sells its product for $40 each in a competitive price-taker market. At its present rate of output, its marginal cost is $40, average variable cost is $45, and average total cost is $60. The business should

A) increase output
B) reduce output but not to zero
C) maintain the present rate of output
D) shut down
E) raise the price