Refer to the accompanying table.A firm participating in a competitive market with these costs would be indifferent about producing or shutting down if the price is

Question

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At a price of $4, the firm's total revenue would be $4 x 5 = $20. If the firm produces, its total cost would be $16 ($6 + $2 + $2 + $2 + $4) and its profit would be $4 ($20 - $16). If the firm shuts down, its profit would be $0. Since the profit from producing is positive, the firm would choose to produce at a price of $4. At any price below $4, the firm would choose to shut down, and at any price above $4, the firm would choose to produce.

Refer to the Accompanying Table