perfectly competitive market is characterized by a large number of small rms that produce a fferentiated product. 5 the case study in the text illustrates, individual rms in the potato industry have a great deal market power. CHOICE. Choose the one alternative that best completes the statement or answers the question. ssume a perfectly competitive rm is producing 300 units of output, P = $10, ATC of the 300th lit is $11, marginal cost of the 300th unit = $10, and AVC of the 300th unit = $9. Based on this formation, the firm is: A) incurring a loss of $300 and should shut down. B) earning an economic prot of $600. C) incurring a loss of $300, but should c0ntinue to operate in the short run. D) earning an economic prot of $300. 9) 10) 11)