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A firm has variable costs of $60,000 at its profit maximizing/loss minimizing production level of 12,000 units, and sells the product for $4.50. Its fixed
A firm has variable costs of $60,000 at its profit maximizing/loss minimizing
production level of 12,000 units, and sells the product for $4.50. Its fixed costs are
$10,000. Is the firm earning an economic profit, economic loss or normal profit?
Should the firm stay in production over the short run? Over the long run? Why?
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