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Assume a Purely Competitive Firm Is Selling 200 Units of Output

Question 4

Multiple Choice

Assume a purely competitive firm is selling 200 units of output at $3 each. At this output, its total fixed cost is $100 and its total variable cost is $350. This firm


A) is maximizing its profit.
B) is making a profit, but not necessarily the maximum profit.
C) is incurring losses.
D) should shut down in the short run.

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