Suppose product price is fixed at 24; MR = MC at Q = 200; AFC = ...

[Collmarie]

Suppose product price is fixed at 24; MR = MC at Q = 200; AFC = 6; AVC = 25 . What do you advise this firm to do?
 a. Increase output.
  b. Decrease output.
  c. Shut down operations.
  d. Stay at the current output; the firm is earning a profit of 1,400.
  e. Stay at the current output; the firm is losing 1,400.

Question 2

Which of the following pairs is most likely to represent substitute goods?
 a. Hamburgers and hamburger rolls.
  b. Movies and popcorn.
  c. Beer and pretzels.
  d. Shoes and shoelaces.
  e. Pork and beef.

[ryhom]

Answer to Question 1

c

Answer to Question 2

e