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Suppose your firm operates in a purely competitive industry. Suppose you find that the price of your product is less than minimum AVC. In the
Suppose your firm operates in a purely competitive industry. Suppose you find that the price of your product is less than minimum AVC. In the short run, you should?
minimize your losses by producing where P = MC | |
maximize your profits by producing where P = MC | |
close down because, by producing, your losses will exceed your total fixed costs | |
close down because total revenue exceeds total variable cost |
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