Homework Answers
No. The firm is covering it's AVC and should continue to produce so it can cover some of it's fixed cost which it will incur whether it will produces Or not.
Explanation: a firm should continue to produce till the point it is able to cover it's AVC in short run. If in case, firm is not able to cover it's AVC then it should shut down the production. In above case MR= MC, it means firm is earning normal profit and it should continue to produce. Also AVC is less than ATC means firm should continue producing output rather than shutting down production.
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Explain.
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