E Final Exam Review Shee × Ye Economics question I c x 0(1 ) chapter 14economi X

Question

E Final Exam Review Shee × Ye Economics question I c x 0(1 ) chapter 14economi X 'Take Test: Chapter 14:E × >c secure https: oswego open suny edu webapps/assessment take launch sp?course assessment d 46093_1&coursed; 24841 1&content;_id- 796396 1 &step-nu; Question Completion Status e. $144 QUESTION 7 1 points Saved Graph 1: MC AVC $10 $8 $6 $2 5 12 1B 24 30 32 34 46 52 Graph 1 depicts the cost structure of a perfectly competitive firm. This firm should shut down at any price below O b. $2 3:13

Explanation / Answer

Answer
Option a
the firm shut down below min(AVC)
because the firm minimize its loss by shutting down if it produces the loss will be
loss=FC+(VC-P)*Q and if it does not produce then the loss is loss=FC
so to minimize losses firm shut down in short run below price min(AVC)=$4

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