Use the figure to answer the following question(s).
Figure 9-5
-If the market price in Figure 9-5 fell to $2.50, what should the firm do?
A) raise its price
B) shut down and wait for conditions to improve
C) continue operating in the short run if it expects conditions to improve
D) go out of business immediately

Question

Use the figure to answer the following question(s).
Figure 9-5 
-If the market price in Figure 9-5 fell to $2.50, what should the firm do?
A) raise its price 
B) shut down and wait for conditions to improve 
C) continue operating in the short run if it expects conditions to improve 
D) go out of business immediately

Quizplus · Accepted Answer

If the firm expects conditions to improve, it should continue operating in the short run despite the low market price, as shutting down would mean losing all revenue.

Use the Figure to Answer the Following Question(s)