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...
If you own a $1,000 face value bond with one year remaining to maturity and a 3 percent coupon rate and new bonds are paying 14 percent, what is the most you can get for your old bond?
A) $903.51 B) $997.19 C) $1,000 D) $1,140
Economics
If cars are normal goods, a fall in income will
a. Increase the demand for cars b. Decrease the demand for cars c. Have no effect on the demand for cars d. None of the above
Economics