Suppose that food stands in San Francisco is a perfectly competitive industry, and one of them (the Taco Truck) produces tacos at a level where its marginal cost is between its average variable cost and its average total cost. Then it will 1. keep producing in the short run but exit the market in the long run. 2. shut down in the short run but return to production in the long run. 3. keep producing both in the short and in the long run. 4. shut down in the short run and exit the market in the long run.
Suppose that food stands in San Francisco is a perfectly competitive industry, and one of them (the Taco Truck) produces tacos at a level where its marginal cost is between its average variable cost and its average total cost. Then it will 1. keep producing in the short run but exit the market in the long run. 2. shut down in the short run but return to production in the long run. 3. keep producing both in the short and in the long run. 4. shut down in the short run and exit the market in the long run.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Suppose that food stands in San Francisco is a
1. keep producing in the short run but exit the market in the long run.
2. shut down in the short run but return to production in the long run.
3. keep producing both in the short and in the long run.
4. shut down in the short run and exit the market in the long run.
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