If a perfectly competitive firm shuts down in the short run, its total cost equals zero.

Name: If a perfectly competitive firm shuts down in the short run, its total cost equals zero.
Brand: Quizplus
Rating: 4.8 (43 reviews)

Question

Quizplus · Accepted Answer

A perfectly competitive firm might shut down in the short run if the price of the product falls below the minimum average variable cost. In this case, the firm still incurs some fixed costs, so its total cost will not be zero.

If a Perfectly Competitive Firm Shuts Down in the Short