1. Claude's Copper Clappers sells clappers for $65 each in a perfectly competitive market. Atits present rate of output, Claude's marginal cost is $65, average variable cost is $45, andaverage total cost is $67. To maximize his profit or minimize his loss in the short run, Claudeshoulda. increase outputb. reduce output but not to zeroc. maintain the present rate of outputd. shut downe. raise price2. Choose two (2) of the incorrect answers to the above multiple choice question and explainwhy they are incorrect.

The correct solution is option c.

Answered: 1. Claude's Copper Clappers sells…

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter8: Perfect Competition

Section: Chapter Questions

Problem 2.4P

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