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If the price of X is $26, the firm will (a) shut down in the short run. Wrong. The company will produce if Price>AVC

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If the price of X is $26, the firm will (a) shut down in the short run. Wrong. The company will produce if Price>AVC at any level of Q. If Price>AVC the company makes some contribution to fixed costs. (b) produce 8 units at an economic loss of $1.04. Correct. Given the price of 26 the minimum loss can be achieved by producing 8 units. (c) produce 9 units at an economic loss of $5. (d) produce 8 units at an economic loss of $9.

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