4/02 - > 0 or if< 0 and< FC Otherwise the firm shuts...

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4/02/08 A firm can experience < 0 and still choose > 0 provided that for < FC. (we still call this decision, “operate”) but suppose > FC and < 0. Then the firm chooses = 0. We call this decision “shut down.” Rule In the short run, a firm operates if
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Unformatted text preview: > 0 or if < 0 and < FC. Otherwise, the firm shuts down. In the long run, a firm only operates if > 0, otherwise the firm exits. We can use this rule to derive the firm’s short and long run supply curves....
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This note was uploaded on 04/18/2008 for the course ECO 2023 taught by Professor O'gorman during the Spring '08 term at South Florida Community College.

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