Suppose a profit-maximizing firm in a competitive market produces rubber bands. When the market price for rubber bands falls below the minimum of its averagetotal cost, but still lies above the minimum of average variable cost, in the shortrun the firm willa. experience losses but will continue to produce rubber bands. b. shut down. c. earn both economic and accounting profits. d. raise the price of its product.
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Home » Business » Suppose a profit-maximizing firm in a competitive market produces rubber bands. When the market price for rubber bands falls below the minimum of its averagetotal cost, but still lies above the minimum of average variable cost, in the shortrun the