m: Exam 03, Sample A (Multiple Choice con se that in the short run, Cyril\'s Sti

Question

m: Exam 03, Sample A (Multiple Choice con se that in the short run, Cyril's Stir Fry minimizes average total costs by re 10. If Cyril chooses an out units. The average total cost to produce 100 units is $ otal cost to produce 100 units is $10. If Cyril chooses an Mp M(maximizes profits, which of the following situations would be true? a. If price is $5, Cyril will produce more than 100 units. b. If price is $10, Cyril will produce 100 units. c. AIC If price is $12, Cyril will produce more than 100 units. d. Both (a) and (c) e. Both (b) and (c) 190

Explanation / Answer

the option (b) is correct

because in short run profit maximizing condition is P=MC=minimum of ATC

P=10, and output=100

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