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At this exogenously fixed price, g*=1000, the firm cannot pull out of this short-run as fixed costs are still positive. Therefore, the firm has two

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At this exogenously fixed price, g*=1000, the firm cannot pull out of this short-run as fixed costs are still positive. Therefore, the firm has two choices: 1. To continue producing at maximum profit, or 2. To lock its doors in an event called a shutdown. To satisfy conditions for shutdown, total revenue should be less than variable cost, which is 2lE

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