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Yesterday, a perfectly competitive producer of construction bricks manufactured and sold 10,000 bricks per week at a market price that was just equal to the minimum average variable cost of producing each brick. Today, all the firm's costs are the same, but the market price of bricks has declined.
(a) Assuming that this firm has positive fixed costs, did the firm earn economic profits, economic losses, or zero economic profits yesterday?
(b) As for today, which option would be the best for the firm - to continue producing in this market, or shut down?
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