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Judge when the farm should keep going

Exercise and reference answers

Questions
  1. Items
    1. Text
      Price above ATC
      Matches the category
      Yes
    2. Text
      Price below AVC
      Matches the category
      No
    3. Text
      P is $5 a pack
      Matches the category
      Yes
    4. Text
      Revenue beats cost
      Matches the category
      Yes
    5. Text
      Price equals ATC
      Matches the category
      No
    Category
    The firm earns a profit
  2. Items
    1. Text
      Price under AVC
      Matches the category
      Yes
    2. Text
      Price above ATC
      Matches the category
      No
    3. Text
      P is $1.80 a pack
      Matches the category
      Yes
    4. Text
      Cannot pay workers
      Matches the category
      Yes
    5. Text
      Price equals ATC
      Matches the category
      No
    Category
    The firm must shut down now
  3. Items
    1. Text
      Profits are zero
      Matches the category
      Yes
    2. Text
      Big profits remain
      Matches the category
      No
    3. Text
      P equals min of AC
      Matches the category
      Yes
    4. Text
      Nobody enters
      Matches the category
      Yes
    5. Text
      Price is below AVC
      Matches the category
      No
    Category
    True of long run equilibrium
Instructions
Tap every item that is true of the situation named at the top of each round.

Explanation

_Source: OpenStax Principles of Microeconomics for AP Courses, section 8.2 How Perfectly Competitive Firms Make Output Decisions_
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