In a perfectly competitive industry the market price is $12. A firm is currently producing 50 units
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In a perfectly competitive industry the market 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
a. Is the firm making the proit-maximizing decision? Why or why not? If not, what should the firm do?
b Consider another firm in a perfectly competitive industry that faces a market price of $25. This firm is producing 10,000 units of output, and average total cost, which at its minimum value, is $25. Answer part a for this firm
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ISBN: 978-0538480871
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Authors: Melissa Barker, Donald I. Barker, Nicholas F. Bormann, Krista E. Neher
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