5. For cases A through Fin the following table, would you(1) operate or shut down in the short run and (2) expand yourplant or exit the industry in the long run?ABCDEFTotal revenue1,5002,0002,0005,0005,0005,000Total cost1,5001,5002,5006,0007,0004,000Total fixed cost5005002001,5001,5001,500

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5. For cases A through Fin the following table, would you (1) operate or shut down in the short run and (2) expand your plant or exit the industry in the long run? E 2,000 5,000 5,000 5,000 D F Total revenue A 1,500 2,000 Total cost 1,500 1,500 2,500 6,000 7,000 4,000 Total fixed cost 500 00 200 1,500 1,500 1,500

5. For cases A through Fin the following table, would you (1) operate or shut down in the short run and (2) expand your plant or exit the industry in the long run? E 2,000 5,000 5,000 5,000 D F Total revenue A 1,500 2,000 Total cost 1,500 1,500 2,500 6,000 7,000 4,000 Total fixed cost 500 00 200 1,500 1,500 1,500

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter8: Perfect Competition

Section: Chapter Questions

Problem 22RQ: How does the average variable cost curve help a firm know whether it should shut down immediately?

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Question

5. For cases A through Fin the following table, would you
(1) operate or shut down in the short run and (2) expand your
plant or exit the industry in the long run?
A
B
C
D
E
F
Total revenue
1,500
2,000
2,000
5,000
5,000
5,000
Total cost
1,500
1,500
2,500
6,000
7,000
4,000
Total fixed cost
500
500
200
1,500
1,500
1,500

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