Question

A firm's optimal output is 1,000 units per month,with a fixed cost of $300 per month and variable cost of $200 per month.The market price of this good is $0.40.The firm decides to shut down.In such a situation,this firm should ________.

Accepted Answer

A)   down production in the short run
B)   not shut down production in the short run
C)   produce more than 1,000 units
D)   continue production for 1 month and then shut downE) A) and B)
F) A) and C)

Exam 6: Sellers and Incentives

A firm's optimal output is 1,000 units per month,with a fixed cost of $300 per month and variable cost of $200 per month.The market price of this good is $0.40.The firm decides to shut down.In such a situation,this firm should ________.

Correct Answer
verified

Exam 6: Sellers and Incentives

A firm's optimal output is 1,000 units per month,with a fixed cost of $300 per month and variable cost of $200 per month.The market price of this good is $0.40.The firm decides to shut down.In such a situation,this firm should ________.

Correct AnswerverifiedShow Answer

Correct Answer
verified