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Suppose you are a consultant who specializes in advising monopolies on how to maximize their profits. Five firms are currently seeking your advice, and although

  1. Suppose you are a consultant who specializes in advising monopolies on how to maximize their profits. Five firms are currently seeking your advice, and although the information they have supplied to you is incomplete, your expert knowledge allows you to make a definite recommendation in each case. For each firm, select one of the following recommendations about what they should do in the short run: 1) remain at the current output level, 2) increase output, 3) reduce output, 4) shut down, or 5) go back and recalculate your figures because the ones supplied cannot possibly be right.

Firm

Price

MR

R

Q

C

MC

ATC

AVC

A

.

9

44000

4000

.

9

11.9

10.74

B

3.9

3

.

2000

7400

2.9

.

3.24

C

5.9

.

.

10000

.

5.9

4.74

4.24

D

35.9

37.9

.

5000

.

27.9

35.9

.

E

35

.

3990

1000

3300

.

at ATCmin

23.94

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