The Perez Lumber Company sells boards in a perfectly competitive market. The cur

Question

The Perez Lumber Company sells boards in a perfectly competitive market. The current marginal cost of boards at the current output of 445 board feet per month is $3.57 per board foot. The price of lumber is currently $3.57 per board foot, and the minimum possible average variable cost of producing lumber is $3.88 per board foot. If the firm wants to maximize profit (or minimize losses), it should a. shut down immediately. b. continue producing at its current output level. c. decrease monthly output to 200 board feet. d. increase monthly output above 445 board feet. I believe that the answer is C (and if not that, A), but I do not know how to actually reason/explain my answer (if I am even correct). Help would be great! Thank you.

Explanation / Answer

Yeah correct answer is C. as if it do so then demand will increase at a vital rate which will ultimately increase the cost of the product and shift them to the profit..!!

Plz. do rate my answer with 5 star ratings.,..!!

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.