Refer to the data provided in Table 9.1 below to answer the question(s) that follow.
Table 9.1 $$\begin{array} { l l l l l l l }
\text { q } & \text { TFC } & \text { TVC } & \text { TC } & \text { MC } & \text { AVC } & \text { ATC } \
\hline 0 & \$ 50 & \$ 0 & \$ 50 & - - & - - & - - \
1 & 50 & 20 & 70 & 20 & 20 & 70 \
2 & 50 & 30 & 80 & 10 & 15 & 40 \
3 & 50 & 45 & 95 & 15 & 15 & 31.67 \
4 & 50 & 62 & 112 & 17 & 15.50 & 28 \
5 & 50 & 90 & 140 & 28 & 18 & 28 \
6 & 50 & 132 & 182 & 42 & 22 & 30.33 \
7 & 50 & 186 & 236 & 54 & 26.57 & 33.71 \
\hline
\end{array}$$
-Refer to Table 9.1. If the market price is $17, then in the short run the firm will
A) operate and expand.
B) operate but not expand.
C) shut down, but not go out of business.
D) go out of business.

Question

Refer to the data provided in Table 9.1 below to answer the question(s) that follow.
Table 9.1 $$\begin{array} { l l l l l l l } 
\text { q } & \text { TFC } & \text { TVC } & \text { TC } & \text { MC } & \text { AVC } & \text { ATC } \
\hline 0 & \$ 50 & \$ 0 & \$ 50 & - - & - - & - - \
1 & 50 & 20 & 70 & 20 & 20 & 70 \
2 & 50 & 30 & 80 & 10 & 15 & 40 \
3 & 50 & 45 & 95 & 15 & 15 & 31.67 \
4 & 50 & 62 & 112 & 17 & 15.50 & 28 \
5 & 50 & 90 & 140 & 28 & 18 & 28 \
6 & 50 & 132 & 182 & 42 & 22 & 30.33 \
7 & 50 & 186 & 236 & 54 & 26.57 & 33.71 \
\hline
\end{array}$$
-Refer to Table 9.1. If the market price is $17, then in the short run the firm will
A) operate and expand.
B) operate but not expand.
C) shut down, but not go out of business.
D) go out of business.

Quizplus · Accepted Answer

In the short run, a firm will continue to operate as long as the price covers the average variable cost (AVC). Here, the market price of $17 is above the AVC for all levels of output, but it is not high enough to cover the average total cost (ATC) at any level of output, indicating the firm cannot make a profit. Therefore, the firm will operate but not expand.

Refer to the Data Provided in Table 9 -Refer to Table 9