A company finds that at its present level of production, MR = MC at $14, MC = AVC at $15, and MC = ATC at $20. Your advice to the firm regarding its short-run operations is

A. to continue production at a loss.
B. to shut down.
C. to continue production, as it is earning an economic profit of $1 per unit.
D. to continue production, as it is earning an economic profit of $6 per unit.


Answer: B

Economics

You might also like to view...

A comparison of the average growth rates across time for developed nations indicates that

A) nations with lower levels of income grow more quickly than those with higher levels of income. B) nations with lower levels of income will never be as rich as nations with high levels of income. C) nations with high levels of income experience a continuously increasing growth rate. D) nations with lower levels of income grow more slowly than those with higher levels of income.

Economics

You and your friends eat potato chips in your bedroom. For you and your friends, the potato chips are rival in consumption

a. True b. False Indicate whether the statement is true or false

Economics

Draw in a new supply curve, S1, on figure, showing an increase in supply. What happens to price and quantity?

Economics

Expectations that the price level will increase in the future will _____

Fill in the blank(s) with the appropriate word(s).

Economics