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If a Competitive Firm Is Producing to the Left of the Minimum

Question 104

Multiple Choice

If a competitive firm is producing to the left of the minimum point of its long-run average cost curve,then


A) it cannot be producing its present output efficiently.
B) it can reduce its unit costs by building a larger plant.
C) it can still be in long-run equilibrium as long as P = SRATC.
D) its profits will decrease if it builds a larger plant.
E) it should shut down.

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