Question #95357
In a perfectly competitive industry, the market price is 20. An individual firm produces output at which MC=25. What should the firm do to maximise profits or to minimise losses in the short run
1
Expert's answer
2019-09-30T09:18:09-0400

The firm should produce such level of output, for which MR = MC = P to maximise profits or to minimise losses in the short run. As P < MC, then the firm should decrease the output produced to the level at which P = MC = 20.


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