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A monopolistically competitive firm is currently producing1,000 units of output and earning$50,000 in revenues. At that level ofoutput, marginal cost is equal to$50 and average
A monopolistically competitive firm is currently producing1,000 units of output and earning$50,000 in revenues. At that level ofoutput, marginal cost is equal to$50 and average total cost is equal to$45. What should this firmdo, ifanything, to maximizeprofit?
A.
Decrease output(but not shutdown)
B.
The firm is already maximizing profit.
C.
Increase output
D.
Shut down
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