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A firm is producing such that MR<MC so they should release less output. The current market...

A firm is producing such that MR<MC so they should release less output. The current market price is $12 and they should release a quantity of 3 to market.

It is a perfectly competitive market and the total cost function is TC(q) = 36 + 2q^2.

1. This firm is losing money by releasing output onto market. Should the firm have chosen to release zero output (i.e. shut down)?

A. Yes
B. No

2. This cannot be a long-run equilibrium because the firm is earning losses. What is the break-even price at which this firm would earn zero profit (round to the nearest integer)?

A. 10
B. 14
C. 17
D. 20
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