Ted should decide to shut down the produce rather than to continue to produce when the price that is incurred to produce is more in comparison to the price at which the product is sold.
If ted continue to produce more and more units he will incur additional average and variable costs and would not be able to generate enough of revenue to cover the production costs.
The firm will still incur other costs such as fixed costs even if needs to shut down or have loss in produce. It is just no benefit of continuing the things the person was doing to run the process and shut it down temporarily for recovery of its variable costs.
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