Is this firm making the profit-maximizing decision

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In yet another competitive industry, the market-determined price is $10. For a firm currently producing 250 units of output, short-run marginal cost is $7, average total cost is $39, and the average variable cost is $9. This firm incurs total quasi-fixed costs of $2,500, thus average quasi-fixed cost is $10 per unit. Is this firm making the profit-maximizing decision? Why or why not? If not, what should the firm do? (Hint: You will need to compute total avoidable cost.)

Reference no: EM131167307

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