EFinal Exam Review Shex- Owww youtube.com x\'( final practice pdf Take Test: Cha
ID: 1124475 • Letter: E
Question
EFinal Exam Review Shex- Owww youtube.com x'( final practice pdf Take Test: Chapter 14:EX eEFinal Exam Review Sh X × >C secure https: oswego open sunyedu/webapps/assessment take launch sp?course assessment d 46093 1 &course; d 24841 1&content;_id- 796396 1 &step-nu; Question Completion Status Clicker Student Registration MindTap QUESTION 1 1 points Scenario 1: Learning Modules Mid-Semester Evals Content Daily (In-Class) Concept Converse has been fairly successful at selling denim colored OZ State sportswear. Lydia, wanting to get in on the profit, has also entered this market. After producing her profit-maximizing level of output she finds that her average total cost per unit is $40, her average variable cost per unit is $30, and her selling price (forced upon her by the market), is $35. In the short run Lydia should a. expand production since she is making a positive economic profit Quizzes Extra Credit Help b, shut down her business Oc.do nothing because she is earning a normal rate of return O d. stay in business even though she is suffering a loss Communication Course Messages My Grades QUESTION 2 1 points Consider the following information about fim "X Output () Total Costs $10 $15 523 536 $73 597 125 6:12 0Explanation / Answer
Answer
Option d
stay in the business even suffering from losses
because
Loss=(P-ATC)*Q=(35-40)*Q=-5Q
Why the frim do not shut down
because the firm will have the loss equal to fixed cost if it shut down and if it does not shut down then the loss is equal to =FC-(P-AVC)Q
also, the firm cannot leave the market in the short run
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