A firm operating in a perfectly competitive market cannot increase its profit. Which of the following must be true in the short run?  A decrease in output will leave profits unchanged. The firm cannot be earning positive economic profit. The firm's average total costs equal marginal costs. The firm's demand curve is downward sloping. The firm's marginal cost equals its price.

ECON MICRO
5th Edition
ISBN:9781337000536
Author:William A. McEachern
Publisher:William A. McEachern
Chapter8: Perfect Competition
Section: Chapter Questions
Problem 6.13P
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10. 

A firm operating in a perfectly competitive market cannot increase its profit. Which of the following must be true in the short run? 
A decrease in output will leave profits unchanged.
The firm cannot be earning positive economic profit.
The firm's average total costs equal marginal costs.
The firm's demand curve is downward sloping.
The firm's marginal cost equals its price.

 

12.
A dairy farmer is operating in a perfectly competitive market. The market price for milk is between the farmer's average variable cost and average total cost at the profit-maximizing level of output. What will the farmer do? 
Produce more milk
Produce less milk
Shut down in the short run
Operate in the short run and leave the industry in the long run
Insufficient information to determine
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