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Chrome File Edit View History Bookmarks People Window elp As @ Take a Test-Ryan Ricer Q > C | Secure https://www.mathxl rfest.aspx?testid= 168241094&centenwin-yes; st: Exam 2 Question: 2 pts 17of45 (36 complete) Revenue and cost (dollars per unit) 50 40 30 20 10 MC ATC AVC 0 10 20 30 40 50 Output (units per day) he above figure shows a perfectly competitive 6rm. If the market price is $5 per unit, the fim A will stay open to produce and will make an economic proft B. will definitely shut down to minimize its losses C. will stay open to produce and wil inour an economic loss D. might shut down but more information is needed about the fixed cost E. will stay open to produce and will make zero economic proft ick to select your answer

Explanation / Answer

a perfectly competitive firm produces where p = mc, now here the price that is charged should be at least the minimum of the average variable cost, here min of AVC is 10, thus the price of 5 isnt suitable thus firm should shut down,

SO answer is B

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