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Average revenue of the firm

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A perfectly competitive firm sells 10 units of Good X at a price of $2 per unit. It incurs a fixed cost of $5 and a variable cost of $40 to produce the good. Which of the following is true?

  • The average revenue of the firm is $20. 

  • The firm should shut down.

  • The firm should operate in the short run but shut down in the long run.

  • The marginal cost of the good is $4.

Reference no: EM131405460

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