Pappy's Popcorn Emporium operates in a perfectly competitive industry and hires you as an economic consultant. Pappy's is currently producing at a point where market price equals its marginal cost. Its total revenue exceeds both its total variable cost and its total cost. You advise Pappy's to
◦ cease production immediately because it is incurring a loss.
◦ raise its price so that it can increase its profit.
◦ continue to produce in the short run to maximize its profit.
◦ lower its price immediately in anticipation of new firms entering the industry.
economic question
economic question
economic question
economic question
economic question
economic question