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Suppose a Perfectly Competitive Firm Is Producing a Level of Output

Question 152

Multiple Choice

Suppose a perfectly competitive firm is producing a level of output for which price equals average total cost,and average total cost is less than marginal cost.In order to maximize its profits,the firm should


A) reduce its output.
B) expand its output.
C) produce zero output.
D) increase the market price.
E) not change its output.

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