For a firm in short-run equilibrium its AR <AC, i.e. it is incurring losses, it will-
A. Immediately stop production
B. Increase its level of output so that its AR becomes more than MR
C. Continue to produce the equilibrium level of output if its AR is either equal to or more than its AVC
D. Pray to God and flood the market with its own product and begin to charge very high prices.
Answer:C
For a firm in short-run equilibrium its AR <AC, i.e. it is incurring losses, it will-
A. Immediately stop production B. Increase its level of output so that its AR becomes more than MR C. Continue to produce the equilibrium level of output if its AR is either equal to or more than its AVC D. Pray to God and flood the market with its own product and begin to charge very high prices.