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Assume for a Competitive Firm That MC = AVC at $12

Question 124

Multiple Choice

Assume for a competitive firm that MC = AVC at $12, MC = ATC at $20, and MC = MR at $16. This firm will


A) realize a profit of $4 per unit of output.
B) maximize its profit by producing in the short run.
C) minimize its losses by producing in the short run.
D) shut down in the short run.

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