If a perfectly competitive firm is incurring an economic loss, it ontinues to operate until either the price rises or its costs fall so that it no longer has an A economic loss Always shut down immediately (B Shuts down if P > AVC (C)

If a perfectly competitive firm is incurring an economic loss, it ontinues to operate until either the price rises or its costs fall so that it no longer has an A economic loss Always shut down immediately (B Shuts down if P > AVC (C)

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter11: The Firm: Production And Costs

Section: Chapter Questions

Problem 3P

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Question

If a perfectly competitive firm is incurring an economic loss, it
It continues to operate until either the price rises or its costs fall so that it no longer has an
economic loss
Always shut down immediately B
Shuts down if P> AVC
Shuts down if P < AVC (D

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