The accompanying graph shows the cost curves for Moe's mushroom gathering business, which is perfectly competitive. If mushrooms sell for $10 per bushel, and Moe chooses the profit-maximizing quantity, he will gather:

Question

The accompanying graph shows the cost curves for Moe's mushroom gathering business, which is perfectly competitive.  If mushrooms sell for $10 per bushel, and Moe chooses the profit-maximizing quantity, he will gather:

Quizplus · Accepted Answer

$10 is below the minimum of the AVC curve, so Moe should shutdown.

The Accompanying Graph Shows the Cost Curves for Moe's Mushroom