Exhibit 8-16 
-Which of the following statements about the perfectly competitive firm represented in Exhibit 8-16 is false?
A) Short-run losses are maximized at output level q* because MR = MC there.
B) The firm should shut down in the short run.
C) If the firm shuts down in the short run, it will suffer a loss equal to the amount of its fixed cost.
D) If the firm operates in the short run, it will suffer a loss greater than the amount of its fixed cost.
E) If the firm operates in the short run, it will suffer a loss equal to the amount of its fixed cost plus the uncovered portion of its variable cost.
Correct Answer:
Verified
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