A competitive firm currently produces and sells 7,500 units of output at a price of $2.50 per unit. The firm's average fixed cost is $0.75 and its average total cost is $2.80 . In the short run, should the firm continue to operate?


Yes, the firm should continue to operate since the price of $2.50 exceeds the average variable cost, which is $2.05.

Economics

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Economics