In a competitive industry the market-determined price is $12. A firm is currently producing 50 units of output; average total cost is $10, marginal cost is $15, and average variable cost is $7. In order to maximize profit, the firm should:

Question

Answer

produce more because the firm is earning a profit of $100.

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keep output the same because the firm is earning a profit of $100

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produce more because the next unit of output increases profit by $2

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none of the above

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produce less because the last unit of output decreased profit by $3

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In a competitive industry the market-determined price is $12. A firm is currentl...

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