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29-02-2020
Business

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A competitive firm maximizes profit at an output level of 500 units, market price is $15.00, and ATC is $15.75. At what range of AVC values for an output level of 500 would the firm choose not to shut down in the short run?

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lazicah lazicah

29-02-2020

Answer:

AVC < $15.00

Explanation:

A firm will continue to produce as long as total revenue covers total variable costs or price per unit > or equal to average variable cost (AR = AVC).

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