Decisions of short run production-price decline

Reference no: EM1371746

A firm produces 10 units per week at a price of $500 each. With AFC of $100 and AVC $350 per unit, the firm is earning economic profits of $500 per week. If the price of the product declines to $400, should the firm continue to produce this product? Explain your answer.

Reference no: EM1371746

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