Exhibit 23-4

-Refer to Exhibit 23-4.Where can you find the lowest price that will motivate the firm to produce Q₁ in the short run?

Question

Exhibit 23-4 -Refer to Exhibit 23-4.Where can you find the lowest price that will motivate the firm to produce Q₁ in the short run?

Quizplus · Accepted Answer

The lowest price that will motivate the firm to produce Q₁ in the short run can be found at the horizontal line running to "AVC," which represents the minimum price necessary to cover variable costs. At any price below this, the firm will not be able to cover its variable costs and will shut down in the short run. The points at P1 and $0 are not relevant in this case.

Exhibit 23-4 -Refer to Exhibit 23-4.Where Can You Find the Lowest Price