State whether the firm should shut down or continue to operate in the short run?
I have absolutely no idea how to do this. Could someone show me the formula and walk me through a problem?
Given the following information, state whether the firm should shut down or continue
to operate in the short run.
a. Q=100; P=$10; AFC=$3; AVC=$4
b. Q=70; P=$5; AFC=$2; AVC=$7
c. Q=150; P=$7; AFC=$5; AVC=$6
- Anonymous7 years agoFavorite Answer
B is correct because price cannot cover average variable cost. P<AVC.