Question

You own four firms that produce different products. The following table summarizes the conditions in each firm. After calculating the missing numbers for each firm, make one of the following four decisions regarding operations in each firm, and explain why a particular decision is reached.

(a) continue producing the same output level

(b) shut down

(c) increase output

(d) decrease output

*hint*- if MR>MC increase; if MR<MC decrease, if MR=MC no change; if AVC>P shut down
Firm P MR TR Q TC MC ATC AVC
A 11 8 20 200 5 9
B 3 1 100 1.5 2.5 2
C 4 2 200 2 7 5
D 8 5 10 70 5 6

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