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