If it stayed it wouldnt make sense because the loss

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Unformatted text preview: because when price increases producers produce more and make more $, therefore their surplus would increase. 26. D, TR = P x Q. 27. C, from Ch.11, we learned that the whole point of price discrimination is for the producer to extract as much surplus from the consumer as possible to maximize profits by charging different P for the same stuff. 28. C, same maximization rule as the monopoly. 29. C, the firm should shut down if P < AVC, because at this point it’s not making enough to cover it’s AVC and is therefore making negative economic profits. If it stayed, it wouldn’t make sense because the loss it incurs from shutdown , which equals FC < loss it incurs for operating [FC + ( ­) profits]. 30. D, just the profit maximization rule. 31. A, because if the firm produces at increasing returns to scale on the LRAC, then it utilizes economies of scale and can therefore increase operat...
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This document was uploaded on 11/30/2013.

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