Question

At its present rate of output, Barrel O' Biscuits, a perfectly competitive firm, finds that its marginal cost exceeds its marginal revenue and its price exceeds its average variable cost. To maximize profit, the firm should _____

Answer 1

Answer: Reduce output

Explanation:

 According to the given question, the barrel O' Biscuits is one of the type of perfectly competitive organization in which its overall marginal cost increasing the company's marginal revenue.

 For maximizing the profit of an organization then we should reduce the output as in the perfect competition the company majorly affected the output only and for shift the overall marginal cost of the company we reducing the output.

 Therefore, Reduce output is the correct answer.