Suppose a firm faces the following cost information when they produce 50 units: ATC=9.00,AVC=7.50.
If the firm is currently able to charge a price of $8.50, what should the firm do?
a. shut down in the short run in order to minimize the loss.
b. continue to produce in the long run and short run since they are earning a profit.
c. shut down immediately since they cannot earn a profit.
d. continue to produce in the short run to minimize losses, but shut down in the long run.
e. there is not enough information to advise this firm on what they should do.