Refer to the figure above. When the demand curve is given by P2 = $15, this firm should ______
A. continue to operate in the short run and think about shutting down in the long run
B. discontinue operation in the short run since there is a loss when operating.
C. keep operating as long as loss is not greater than total cost
D. discontinue operation in the short run since average total cost is greater than price.
When the demand is P3 = $10, this firm should ______
A. continue to operate in the short run and think about shutting down in the long run
B. discontinue operation in the short run since the firm is unable to cover variable costs.
C. keep operating as long as loss is not greater than total cost
D. discontinue operation in the short run since average total cost is greater than price.
Trending now
This is a popular solution!
Step by step
Solved in 1 steps
