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Megatron is a competitive firm operating under the following conditions: Price of output is $15,the profit-maximizing level of output is 40,000 units , and the total cost of producing 40000 units is $
Megatron is a competitive firm operating under the following conditions: Price of output is $15,the profit-maximizing level of output is 40,000 units , and the total cost of producing 40000 units is $650,000. The firms only fixed factor of production is a $750,000 stock of capital. If the interest rate available on comparable risks is 8 percent, should this firm shut down immediately in the short run? Explain your answer