In Figure 23.3, diagram "a" presents the cost curves that are relevant to a firm's production decision, and diagram "b" shows the market demand and supply curves for the market. Use both diagrams to answer the following question: In Figure 23.3, if market demand is at D₁, the firm should A) Leave the market. B) Produce q₁. C) Shut down. D) Do any of the above depending on the position of the AVC and the length of the time period.

Question

Quizplus · Accepted Answer

The Answer of In Figure 23.3, diagram "a" presents the cost curves that are relevant to a firm's production decision, and diagram "b" shows the market demand and supply curves for the market. Use both diagrams to answer the following question: In Figure 23.3, if market demand is at D₁, the firm should A) Leave the market. B) Produce q₁. C) Shut down. D) Do any of the above depending on the position of the AVC and the length of the time period.