A perfectly competitive firm decides to shut down if: O the price falls below the average-total-cost. O the price falls below the marginal cost. average revenue falls below the average-variable-cost. O the average revenue curve lies below the marginal cost curve. the total revenue is less than total cos

Q: 10 20 30 40 50 60 Quantity (units per day)

A: The given figure represents the case of a perfect competition market. This is a market structure…

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A:

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Profit Maximization

Economic activity is related to the use of scarce resources of the economy that are used for producing goods and services which are required to satisfy various demands of the people. In other words, it can be said that it is all about satisfying the unlimited demands of individuals with the limited resources available. The production decision is taken by the producers or the firms. In economics, the terms ‘producers’, ‘suppliers’, and ‘firms’ are interchangeable. Now the question arises, what does a firm actually mean?