A firm currently faces a market price of $7. If producing output where MC= $7, it would produce 11 units of output. At this level of output, AVC is $7.50 and ATC is $10.25. Which of the following statements is true? a) If the firm produces, it loses $30.25. If the firm shuts down, it loses $35.75. The firm should shut down. b) If the firm produces, it loses $35.75. If the firm shuts down, it loses $30.25. The firm should shut down. c) If the firm produces, it loses $35.75. If the firm shuts down, it loses $30.25. The firm should produce. d) If the firm produces, it loses $30.25. If the firm shuts down, it loses $35.75. The firm should produce.

A firm currently faces a market price of $7. If producing output where MC= $7, it would produce 11 units of output. At this level of output, AVC is $7.50 and ATC is $10.25. Which of the following statements is true? a) If the firm produces, it loses $30.25. If the firm shuts down, it loses $35.75. The firm should shut down. b) If the firm produces, it loses $35.75. If the firm shuts down, it loses $30.25. The firm should shut down. c) If the firm produces, it loses $35.75. If the firm shuts down, it loses $30.25. The firm should produce. d) If the firm produces, it loses $30.25. If the firm shuts down, it loses $35.75. The firm should produce.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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