Multiple Choice
Equilibrium price is $25 in a perfectly competitive market. For a perfectly competitive firm, MR = MC at 2,000 units of output. At 2,000 units, ATC is $33, and AVC is $27. The best policy for this firm is to __________ in the short run. Also, total fixed cost equals __________ and total variable cost equals __________ for this firm.
A) continue to produce; $12,000; $54,000
B) shut down; $12,000; $54,000
C) shut down; $66,000; $54,000
D) continue to produce; $150; $1,500
E) There is not enough information to answer all parts of the question.
Correct Answer:
Verified
Correct Answer:
Verified
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