Rules of maximum profit

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A firm must sell its product at a market price of $1.90. Its present operating figures are as follows: average cost, $2.00; marginal cost, $1.50; average variable cost, $1.50; total fixed costs, $500 per period. By the rules of maximum profit (or minimum loss) for a competitive firm, this firm would:

a. increase its present output level.

b. reduce its present output level.

c. remain at its present output position.

d. shut down.

Reference no: EM133131450

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