Equilibrium Price Is $19 in a Perfectly Competitive Market

Equilibrium price is $19 in a perfectly competitive market. For a perfectly competitive firm, MR = MC at 120 units of output. At 120 units, ATC is $11, and AVC is $8. The best policy for this firm is to __________ in the short run. Also, this firm earns __________ of __________ if it produces and sells 120 units. Finally, the difference between total revenue and total fixed cost for this firm is __________.

A) continue to produce; profits; $960; $1,920
B) continue to produce; losses; $960; $1,000
C) shut down; losses; $1,200; $2,300
D) continue to produce; profits; $1,920; $1,960
E) none of the above

Correct Answer:

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Access For Free