Afirm sells a product in a purely competitive market. the marginal cost of the product at the current output of 200 units is $4.00. the average variable cost is $3.50. the market price of the product is $3.00. to maximize profits or minimize losses, the firm should
a. continue producing 1,000 units
b. produce less than 1,000 units
c. produce more than 1,000 units
d. shut down

The correct answer is option B.

Explanation:

A firm sells a product in a purely competitive market.

The marginal cost of the product at the current output of 200 units is $4.00.

The average variable cost is $3.50.

The market price of the product is $3.00.

The market price is not covering the average variable cost. In this situation, the firm must be incurring losses. To minimize losses the firm should produce less than 1,000 units at the point where marginal cost is equal to market price and the average variable cost is being covered.

decentralization can the employees to get more involved in the business decision making

odd consecutive integers are odd integers that follow each other. they have a difference of 2 between every two numbers. if n is an odd integer, then n, n+2, n+4 and n+6 will be odd consecutive integers. the first number in the pattern is always the variable on its own or in this case, "n". examples.