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Ajax is a competitive firm operating under the following conditions Price of output is $5 the profit-maximizing level of output is 20000 units of output and the total cost (full economic cost

Ajax is a competitive firm operating under the following conditions: Price of output is $5, the profit-maximizing level of output is 20,000 units of output, and the total cost (full economic cost) of producing 20,000 units is $120,000. The firm’s only fixed factor of production is a $300,000 stock of capital (a building). If the interest rate available on comparable risks is 10 percent, should this firm shut down immediately in the short run? Explain your answer.

May 16 2020 View more View Less

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