Author Question: Consider the following total cost schedule for a perfectly competitive firm producing ball-point ... (Read 42 times)

olgamartinez04 · **on:** Oct 12, 2022

Consider the following total cost schedule for a perfectly competitive firm producing ball-point pens.

Output per period	TVC ($)	TFC ($)
0	0	5
10	2	5
20	3	5
30	6	5
40	10	5
50	15	5

TABLE 9-2

Refer to Table 9-2. Suppose the prevailing market price for this firm's product is $0.14 and the firm is currently producing 20 units of output. This competitive firm wishing to maximize profits would
◦ produce zero output because price is less than the minimum average variable cost.
◦ increase output because marginal revenue is greater than marginal cost.
◦ increase output because marginal revenue is less than marginal cost.
◦ decrease output because marginal revenue is less than marginal cost.
◦ decrease output because marginal revenue is greater than marginal cost.

athenaheim · **Reply #1 on:** Oct 12, 2022

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