BuyFind

Exploring Economics

8th Edition
Robert L. Sexton
Publisher: SAGE Publications, Inc
ISBN: 9781544336329
BuyFind

Exploring Economics

8th Edition
Robert L. Sexton
Publisher: SAGE Publications, Inc
ISBN: 9781544336329

Solutions

Chapter
Section
Chapter 12, Problem 8P
Textbook Problem

Discuss the following questions.

a. Why must price cover AVC if firms are to continue to operate?

b. If the firm is covering its AVC but not all its fixed costs, will it continue to operate in the short run? Why or why not?

c. Why is it possible for price to remain above the average total cost in the short run but not in the long run?

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