At a price of $2.20 per pack, the raspberry farm produces 50 packs and loses $56, but price is above average variable cost at that output. According to the source, what should the farm do?

1. The shutdown decision depends on whether price covers average variable cost, not on whether the firm is profitable overall. 2. Here price is above average variable cost even though the farm is losing $56. 3. The farm continues to operate in this situation, since it is more than covering its variable costs and is offsetting part of its fixed costs. 4. As a price-taking firm, it cannot simply raise its price above the market rate without losing all its sales. _Source: OpenStax Principles of Microeconomics for AP Courses (CC BY 4.0), Ch 8 "Perfect Competition", section 8.2 | How Perfectly Competitive Firms Make Output Decisions_