A firm with total, unavoidable, fixed costs of $1 million and (unchanging) average variable costs = $40 per unit faces a market where the price is fixed at $50 per unit.

a)What is the minimum quantity it must sell each year to break-even?

b)If the fixed assets are already in place, what is the shutdown quantity below which the firm should not operate?

c)Provide two logical reasons a firm might operate while producing less than the shutdown quantity?