Facing possible economic loss the perfectly

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3. Facing possible economic loss, the perfectly competitive firm is still better off producing in the short run than not producing provided that at the (optimally) chosen output level, a. average fixed cost is less than the monetary loss per unit of output. b. price equals marginal cost. c. output price is less than the average variable cost. d. output price exceeds the average variable cost. e. under no circumstances should the firm continue to produce. 4. Consider the following set of given information. At its present level of output of 400 units, a perfectly competitive firm discovers that its marginal cost is $4 and its total revenue is $1400. At an output level of 500 units, average total cost and marginal cost are both equal $5. At an output level of 300 units, marginal cost is $3 and is equal to average variable cost. If the firm wishes to maximize profit in the short run, which of the following should it do? 1
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