Suppose a Perfectly Competitive Firm Is Producing 1,000 Units of Output

Multiple Choice

Suppose a perfectly competitive firm is producing 1,000 units of output and the marginal cost of the 1,000ᵗʰ unit is $7. If the firm can sell each unit of output for $7 and the firm's revenue is sufficient to cover its variable cost, the firm should:

A) leave production unchanged.
B) increase price to increase profits.
C) increase production to increase profits.
D) decrease production to lower losses.