Multiple Choice
Exhibit 10-2 
-Consider Exhibit 10-2. If the firm is charging price P* for output q*, then in order to minimize loss in the short run, the firm should
A) shut down because price is greater than average variable cost
B) shut down because price is greater than marginal cost
C) shut down because price is less than average variable cost
D) continue to produce because price is greater than average variable cost
E) continue to produce because price is greater than marginal cost
Correct Answer:
Verified
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