-Refer to Figure 22.3 for a perfectly competitive firm.If the market price is $10,
A)The firm should produce 31 units.
B)The firm will shut down in the short run.
C)An economic loss will occur.

Question

-Refer to Figure 22.3 for a perfectly competitive firm.If the market price is $10,
A)The firm should produce 31 units. 
B)The firm will shut down in the short run. 
C)An economic loss will occur.

Quizplus · Accepted Answer

If the market price is $10 and it is below the firm's average total cost, the firm will incur an economic loss.