Answered: When do firms decide to shut down…

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter21: Production And Costs

Section21.4: Costs Of Production: Total, Average, Marginal

Problem 1ST

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When do firms decide to shut down production in the short run? Explain it.
How is the short run average cost curve and the long run average cost curve shaped? What is the difference between them?

Graphical representation of the short-run total cost curve showing total cost, fixed cost, variable cost:

and

The marginal cost and average total cost:

600
500
400
-Total cost
300
-Fixed cost
-Variable cost
200
100
5
10
15
20

140
120
100
80
- Marginal cost
- Average total cost
60
40
20
10
15
20

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