Biology Forums - Study Force

The Short Run Supply Curve and Shutting Down

The table shows the profit-maximizing quantity, variable costs, and fixed costs for two different firms.

​	Firm 1	Firm 2
Quantity	1000	500
Variable cost	$4500​	$7500​
Fixed cost	$392​	$94​

Assume that the market price is $9. In the short run:
Firm 1 will ________ (produce/shut down) with an economic ________ (profit/loss).
Firm 2 will ________ (produce/shut down) with an economic ________ (profit/loss).

▸ produce, loss, produce, loss

▸ produce, profit, shut down, loss

▸ shut down, loss, produce, profit

▸ shut down, loss, shut down, loss

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