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Suppose the market for microwave ovens is perfectly competitive. Also suppose a firm that produces microwave ovens has an average total cost of $200 when
Suppose the market for microwave ovens is perfectly competitive. Also suppose a firm that produces microwave ovens has an average total cost of $200 when selling 200 units. The fixed cost is $100, and the average total cost when selling 201 units is $201. If the market price for a microwave oven is $500, this firm should O sell 201 units because the marginal cost of the 201st is less than marginal revenue. O sell 201 units because its fixed costs are so low. O sell 201 units because it adds to profits. O sell 200 units because the marginal cost of the 201st exceeds marginal revenue
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