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5 October, 14:12

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

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  1. 5 October, 17:29
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    The firm Should decrease the output.

    Because as we see selling price P is LESS than Marginal Cost (MC) and in perfect competition P=MC for efficient allocation. So By decreasing output firm can decrease MC ⇒ which leads to output where P=MC.
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