The figure to the right represents the cost structure for a perfectly competitive firm with its average total cost (ATC) curve, average variable (AVC) curve, and marginal cost (MC) curve Fixed costs are $50.00 Suppose the market price is $21.00 per unit. Characterize the firm's profit. If the firm produces output, then it will Should the firm instead shut down in the short run? In the short run, the firm should if the firm produces output, then it will Should the firm instead shut down in the short run? In the short run, the firm should OA. shut down because price is greater than average variable cost. B. continue to produce because price is greater than average fixed cost. C. shut down because price is less than fixed costs D. shut down because price is less than average total cost. OE. continue to produce because price is greater than average variable cost CED Price and cost que would 30.00 28.00 26.00 24.00 22.00 20.00 18.00 16.00 14.00 12:00- 10.00- 8.00 20.00- 18.00 16.00 14.00 12.00 10.00 8.00 6.00 400- 2.00 0.00 Quantity MC ATC Q stiina AVC

The figure to the right represents the cost structure for a perfectly competitive firm with its average total cost (ATC) curve, average variable (AVC) curve, and marginal cost (MC) curve Fixed costs are $50.00 Suppose the market price is $21.00 per unit. Characterize the firm's profit. If the firm produces output, then it will Should the firm instead shut down in the short run? In the short run, the firm should if the firm produces output, then it will Should the firm instead shut down in the short run? In the short run, the firm should OA. shut down because price is greater than average variable cost. B. continue to produce because price is greater than average fixed cost. C. shut down because price is less than fixed costs D. shut down because price is less than average total cost. OE. continue to produce because price is greater than average variable cost CED Price and cost que would 30.00 28.00 26.00 24.00 22.00 20.00 18.00 16.00 14.00 12:00- 10.00- 8.00 20.00- 18.00 16.00 14.00 12.00 10.00 8.00 6.00 400- 2.00 0.00 Quantity MC ATC Q stiina AVC

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter7: Perefect Competition

Section: Chapter Questions

Problem 10SQP

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