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when deciding In the short run, a firm must consider the relationship between price and whether to operate or shut down. aver
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In the short run, a firm must consider the relationship between price and average variable cost when deciding whether to operate or shut down. If in the short run, at the profit maximizing output level, price < AVC, which means total revenue < total variable cost, then the firm will shut down in the short run because it won't be able to cover at least it's variable cost. If price > AVC, the firm will continue to operate in the short run and if price = AVC, the firm will be indifferent between production and shutting down in the short run.

Answer: Average variable cost

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