The owner of Tie-Dyed T-shirts, a perfectly competitive firm, hires you to give him economic advice. He tells you that the market price for his shirts is $15 and that he is currently producing 200 shirts at an AVC of $10 and an ATC of $20. You tell him he should continue to operate in the short run because
A) he is earning an economic profit of $4,000.
B) his loss from operating in only $2,000 which is less than his loss if he shuts down.
C) he has to pay this fixed costs of $2,000 if he shuts down which is greater than his loss when he operates.
D) In fact you do not tell him to operate-he should shut down since he has a loss.

Question

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The Answer of The owner of Tie-Dyed T-shirts, a perfectly competitive firm, hires you to give him economic advice. He tells you that the market price for his shirts is $15 and that he is currently producing 200 shirts at an AVC of $10 and an ATC of $20. You tell him he should continue to operate in the short run because
A) he is earning an economic profit of $4,000.
B) his loss from operating in only $2,000 which is less than his loss if he shuts down.
C) he has to pay this fixed costs of $2,000 if he shuts down which is greater than his loss when he operates.
D) In fact you do not tell him to operate-he should shut down since he has a loss.

The Owner of Tie-Dyed T-Shirts, a Perfectly Competitive Firm, Hires