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The Ajax Manufacturing Company Is Selling in a Purely Competitive

Question 106

Multiple Choice

The Ajax Manufacturing Company is selling in a purely competitive market. Its output is 100 units, which sell at $4 each. At this level of output, total cost is $600, total fixed cost is $100, and marginal cost is $4. The firm should


A) reduce output to about 80 units.
B) expand its production.
C) continue to produce 100 units.
D) produce zero units of output.

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