Your firm has a price of $5, an average total cost of $7, and an average variable cost of $4. in the short run, you should /shut down) because average variable cost price . in the long run, you should in/exit) the market because average total cost price variable cost price average total cost .

Step-by-step explanation:

Given that a firm has  a price of $5, an average total cost of $7, and an average variable cost of $4

Price = 5

Var cost = 4

Contribution = 1 dollar per unit

Since contribution is positive, there is scope for getting profit by increasing production.

In the short run, you should __operate(operate/shut down) because __Priceexceeds average variable cost price . In the long run, you should __exit(stay in/exit) the market because average total cost price exceedsprice.average variable cost price average total cost

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step-by-step explanation:

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