Suppose that at 500 units of output, the marginal revenue is equal to marginal cost. The firm is selling its output at $10 per unit and average total...

Suppose that at 500 units of output, the marginal revenue is equal to marginal cost. The firm is selling its output at $10 per unit and average total cost at 500 units of output is $6. On the basis of this information, we:

1 can say that the firm should close down in the short run.

2 can assume the firm is not using the most efficient technology.

3 can say that the firm can produce and realize an economic profit in the short run.

4 cannot determine whether the firm should produce or shut down in the short run.