Determine whether the following perfectly competitive firm should produce output in the short run or temporarily shut down, given:
P = $350
TC = 3,250 + 100Q + 2Q2
Q is units produced per month
If the firm does not operate, it will lose its $3,250 of fixed costs. What profit or loss will the firm have if it operates where MR = SMC? Does this profit or loss check with your decision on whether to produce or temporarily shut down.
Get Answers For Free
Most questions answered within 1 hours.