Consider the graph below. Should this firm stay open or shut down in the short run and why? ATC* P* AVC* A B 10 MC AVC -MR q Stay open because their loss from operating is greater in magnitude than their fixed costs Stay open because their loss from operating is less in magnitude than their fixed costs ATC Shut down because their loss from operating is greater in magnitude than. their fixed costs. operating is less in magnitude than
Consider the graph below. Should this firm stay open or shut down in the short run and why? ATC* P* AVC* A B 10 MC AVC -MR q Stay open because their loss from operating is greater in magnitude than their fixed costs Stay open because their loss from operating is less in magnitude than their fixed costs ATC Shut down because their loss from operating is greater in magnitude than. their fixed costs. operating is less in magnitude than
Chapter12: Firms In Perfectly Competitive Markets
Section: Chapter Questions
Problem 18P
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