If a competitive firm can sell a bushel of soybeans for $25 and it has an...

If a competitive firm can sell a bushel of soybeans for $25 and it has an average variable cost of $24 per bushel and the marginal cost is $26 per bushel, the firm should:

increase the price

cut output to zero

reduce output

expand output

Expert Solution

"A"

The firm should increase the price, a competitive firm in the market maximse the profit at the point where the price and marginal cost are the same. The answer is "A".

Rahul Sunny answered 2 years ago

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