Should you keep on producing the good

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Reference no: EM131009712

Your average total cost is $24; the price you receive for the good is $18. Should you keep on producing the good? Why?

A. You should continue producing in the long run because you are earning an economic profit.

B. You should not produce in the long run because you are earning an economic loss. All inputs are variable in the long run so you can go out of business.

C. Maybe. It depends on whether you are covering average variable costs in the long run.

D. You should produce in the long run as long as you are only earning small losses. It is always possible to make up a small loss.

Reference no: EM131009712

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