when a firm faces a market price that is between the minimums of average total cost...

when a firm faces a market price that is between the minimums of average total cost and average variable cost, which of the strategies should it choose?

a. continue to produce and sell output because it will maximize its economic profit

b. produce nothing and shut down the business

c. produce nothing and keep the business

d. continue to produce and sell output because it will minimize its economic loss

Expert Solution

d. Is correct

The firm should keep on producing in the short run when price is in between average total cost and average variable cost.

Rahul Sunny answered 2 years ago

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