Question
A firm produced 100 units of a commodity in the first week of December 2020. The AFC was $6, and TC was $1200. The firm
A firm produced 100 units of a commodity in the first week of December 2020. The AFC was $6, and TC was $1200. The firm sold the produce for $ 1500 making a profit of $300. In the second week, the TR of the firm suddenly came down to $1000 while the AFC, TC and the units produced remained the same. So, there was a loss of $200. The manager of the firm decided to shut down the firm. The owner of the firm consulted an economist who declared that the decision of the manager to shut down in the short run was wrong. Do you agree or disagree with the economist and why? Write the full explanation
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started