Homework Answers
Answer: b. Will sell its good at market price.
Because in a competitive firm there are a large number of buyers and sellers, and the firm is a price taker. So if the firm sells below the market price then it will definitely bear losses. If the firm sells above the market price then buyers will have many sellers from which they can buy at a cheaper price, this will also lead to losses. Hence selling at the market price is when the firm can maximize profit.
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