Using the graph below, determine if the firm should shut down or stay open in the short run. MC ATC AVC MR O The firm is earning a positive economic profit. The firm is earning a negative profit but they should stay open and produce a positive quantity of output because they are covering some of their fixed costs. O The firm is earning a negative profit and they should shut-down and produce zero units of output because they are unable to cover their fixed costs. O The firm is earning negative profit and they should shut-down and produce zero units of output becuase they are unable to cover their variable costs. O O

Using the graph below, determine if the firm should shut down or stay open in the short run. MC ATC AVC MR O The firm is earning a positive economic profit. The firm is earning a negative profit but they should stay open and produce a positive quantity of output because they are covering some of their fixed costs. O The firm is earning a negative profit and they should shut-down and produce zero units of output because they are unable to cover their fixed costs. O The firm is earning negative profit and they should shut-down and produce zero units of output becuase they are unable to cover their variable costs. O O

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question 20 of 20 Reggie owns and operates a cheese shop in the village of Somerset. Although Reggie has a degree in mechanical engineering and could easily go to work for his brother's company earning $76000 a year, his true passion is for cheese. Consider the list of Reggie's revenue and expenses from last year. Please use the information provided to answer the questions. Revenue from 2010 $90000 Rent $18000 Equipment $6000 Supplies $3000 What is Reggie's accounting profit? What is Reggie's economic profit? -$13000 $63000 $3000 O -$13000 -$63000 $3000 $63000 -$63000