Question

Exhibit 8-17 Marginal revenue and cost per unit curves



As shown in Exhibit 8-17, the firm will produce in the short run if the price is:

ATC 1 AVC Price and costs per unit (dollars) 0 20 100 40 60 80 Quantity of output (units per day)

Group of answer choices

A. more than $10 per unit.

B. more than $15 per unit.

C. more than $20 per unit.

D. more than $30 per unit.

E. more than $40 per unit.

Answer 1

Answer
Option B
the price should be above the minimum of AVC and the minimum of AVC is at point B where MC=AVC, so the price should produce if the price is above B where approximately $15 from the curves for minimum AVC.