a-firm-faces-a-market-price-of-10-and-its-average-variable-cost-is-12-what-shoul

Question

A firm faces a market price of $$10, and its average variable cost is 12. $$What should the firm do?

Accepted Answer

Shut down production.

Answer

Increase production to reduce average costs.

Answer

Continue production to cover fixed costs.

Answer

Exit the market permanently.

A firm faces a market price of \$10, and its average variable cost is \$12. What should the firm do?