Question 5 1 pts The following diagram shows the cost curves of a firm under perfect competition. f MC 110 100 AC 90 AVC 80 70 60 50 40 30 20 10 0 5 10 15 20 25 30 35 40 45 Quantity At a price of 40, the firm produces units with an average cost of and the firm has a profit of Suppose that the market price jumps to 80. Now the firm produces units with an average cost of and the firm has a profit of Now the market price is 50. In the short run the firm produces units and the profit at this quantity of output is In the short run, the firm produces zero it the market price is below In the long run the firm will shut down it the market price is below