Multiple Choice
UG Tech Inc.is a perfectly competitive firm producing wireless mouses where marginal revenue is equal to marginal cost.The current market price of wireless mouse is $30.00.UG Tech Inc.sells 500 wireless mouses.Its short run average variable cost is $10.00 and its average fixed cost is $5.00.What should UG Tech Inc.do?
A) Continue to produce because price exceeds short run average variable cost.
B) Shut down and produce zero sandwiches because price is less than short run average variable cost.
C) Decrease production so that short run average variable cost will decrease.
D) Increase production so that average fixed cost will decrease.
Correct Answer:
Verified
Correct Answer:
Verified
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