3. A firm in a perfectly competitive industry finds itself in the following position: output =1000 units, market price = $3, total cost = $6,000, fixed cost = $2,000, marginal cost = $3. If the firm behaves as a profit maximizer, it should:
  1. reduce output in the short run, but should increase output in the long run.
  2. shut down in the long run, but continue producing output in the short run.
  3. shut down in the long run, and shut down in the short run.
  4. increase output in the short run, but reduce output in the long run.
  5. shut down in the short run, but continue producing output in the long run.

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