The perfectly competitive firm will produce in the

Question

Quizplus · Accepted Answer

In the short run, the perfectly competitive firm will produce any output level as long as the price is above its average variable cost. However, in the long run, the firm must cover all of its costs, including fixed costs, to remain in the market. Thus, the firm will only produce in the long run if the price is above its average total cost. Therefore, the option that describes the short-run condition for production is correct, as it is the only answer that includes the condition for short-run pricing (above average variable cost) while also taking into account the condition for long-run pricing (below average total cost).

The Perfectly Competitive Firm Will Produce in the