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Title: A perfectly competitive firm can produce its current level of output at an average total cost of $10 ... Post by: MrsSmitty on Oct 1, 2023 A perfectly competitive firm can produce its current level of output at an average total cost of $10 and a marginal cost of $8. If the market price of the product is currently $8, what should the firm do? ▸ The firm should definitely shut down since average total cost exceeds price. ▸ The answer depends upon the relationship between price and average variable cost. The firm should shut down if average variable cost is $8 or greater, but the firm should continue to produce the current level of output if average variable cost is less than $8. ▸ The firm should increase production in order to increase profit. ▸ The firm should continue to produce, but they should decrease production in order to increase profit. Title: Re: A perfectly competitive firm can produce its current level of output at an average total cost of $10 ... Post by: HCho0 on Oct 1, 2023 Content hidden
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