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Application of Perfect Competition decision making process to max profits You have been hired as a consultant to make recommendations to the 4 firms listed

Application of Perfect Competition decision making process to max profits

You have been hired as a consultant to make recommendations to the 4 firms listed below. Each of the competitors wants to maximize profits. Each row represents a separate firm. Apply the rules of marginal analysis to help you advise each of the firms separately. For example should they increase or decrease output, do nothing, or shut down.

Explain your rationale for each firm (why you made the recommendations you listed)

Perfect Competition firms:

Price

Q

TR

TC

P/L

TVC

ATC

AVC

MC

4

100

400

350

+50

300

3.5

3

5

10

20

200

500

-300

300

25

15

10

50

100

5000

5100

-100

3000

51

30

90

25

100

2500

2500

0

2000

25

20

25

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1 Firm should not do anything as it is earning profits and there is no scope to increase it fu... blur-text-image

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