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8. The following figure illustrates the cost functions for a farm. Use the information to answer the following questions. Marginal Cost and Average Cost Functions

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8. The following figure illustrates the cost functions for a farm. Use the information to answer the following questions. Marginal Cost and Average Cost Functions Costs ATC MC.ATC AVC AVC MC P3 P2 PI 10 20 Quantity a. Describe the production decision for the farm if the current market price is at P3. Determine if the firm would need to shut down and if profits are positive or negative. b. Describe the production decision for the farm if the current market price is at P2. Determine if the firm would need to shut down and if profits are positive or negative

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