If a fi rm’s total revenue is $20 million, its fi xed costs are $12 million, and its variable costs are $22 million, what does it do:

(a) in the short run?

(b) in the long run? (LO8)

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TABLE 2 Variable Total Output Cost Cost AVC ATC 1 $ 400 23456 700 900 1,350 2,000 3,000 Marginal Cost