Karlos sells his product for $40 each in a competitive price-taker market. At his present rate of output, his marginal cost is $39, average variable cost is $25, and average total cost is $45 . To improve his profit/loss situation, Karlos should
a. increase output
b. reduce output but not to zero
c. maintain the present rate of output
d. shut down
e. raise the price
A
Economics
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Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
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