Refer to Figure 9.3. This firm will continue to operate in the short run, but incur an economic loss if price is

A) between $0 and $4.
B) between $4 and $7.
C) between $7 and $13.
D) above $13.

Question

Refer to Figure 9.3. This firm will continue to operate in the short run, but incur an economic loss if price isA)  between $0 and $4.B)  between $4 and $7.C)  between $7 and $13.D)  above $13.

Brandon Mayner · Accepted Answer

Final Answer : C, Explanation :  In the short run, a firm will continue to operate as long as it can cover its variable costs, even if it's incurring an economic loss. This is because shutting down would mean not covering any fixed costs, leading to a larger loss. The price range between $7 and $13 indicates that the firm covers its variable costs but not its total costs (including fixed costs), leading to an economic loss. However, it's still more beneficial to operate than to shut down in this scenario.

Refer to Figure 9.3. This firm will continue to operate in the short run, but incur an economic loss if price is

A) between $0 and $4.
B) between $4 and $7.
C) between $7 and $13.
D) above $13.

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Learning Objectives

Learning Objectives

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