Megatron is a competitive firm operating under the following conditions: Price of output is $15, the profit-maximizing

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Megatron is a competitive firm operating under the following conditions: Price of output is $15, the profit-maximizing level of output is 40,000 units, and the total cost (full economic cost) of producing 40,000 units is $650,000. The firm’s only fixed factor of production is a $750,000 stock of capital (a building). If the interest rate available on comparable risks is 8 percent, should this firm shut down immediately in the short run? Explain your answer.

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