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Refer to the attachment for a perfectly competitive firm. If the market price is $10

a) the firm should produce 25 units

b) the firm will continue to operate in the short run

c) an economic loss will occur

d) all of the above

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Solution Summary

This explains the concept of market price in perfect competition market

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If the market price is $10

d) all of the above

The firm should produce 25 units as its the equilibrium point and it will be operating in short run as Market price is equal or greater than AVC. There is an economic loss as AVC is more than ...

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