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Posts: 231
A month ago
Output (Q)Total Fixed CostTotal Variable Cost
0200
1205
2207
32010
42015
52021

Table 9.1


Table 9.1 shows the cost structure of a firm in a perfectly competitive market. If the market price is $3:

▸ the firm suffers a loss and is better off shutting down.

▸ the market price is greater than the minimum average variable cost.

▸ the firm suffers a loss but is better off producing the output level where MR = MC.

▸ none of the above
Textbook 

Microeconomics: Principles, Applications, and Tools

Edition: 8th
Authors:
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Do What Makes You Come Alive
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the firm suffers a loss and is better off shutting down.
1
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wrote...
A month ago
Thank you for answering so quickly
Do What Makes You Come Alive
wrote...
A month ago
Was feeling bored, my pleasure Grinning Face with Smiling Eyes
Answer accepted by topic starter
wrote...
A month ago
Output (Q)Total Fixed CostTotal Variable Cost
0200
1205
2207
32010
42015
52021

Table 9.1


Table 9.1 shows the cost structure of a firm in a perfectly competitive market. If the market price is $5:

▸ the market price is lower than the average variable cost at the profit maximizing output level.

▸ the market price is lower than its marginal cost at the profit maximizing output level.

▸ the firm suffers a loss but is better off producing at the output where MR = MC.

▸ the firm suffers a loss and is better off shutting down.
Answer verified by a subject expert
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the firm suffers a loss but is better off producing at the output where MR = MC.
1
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