In perfectly competitive markets, if the price is _______ , the firm will _______ .

Question

Quizplus · Accepted Answer

All the statements accurately describe scenarios in a perfectly competitive market: A) Firms make an economic profit if the price is above average total cost (ATC). B) Firms will shut down in the short run if the price falls below the minimum average variable cost (AVC), as they cannot cover their variable costs. C) If the price is above the minimum AVC but below the ATC, firms will continue to produce in the short run despite incurring losses, as they can cover their variable costs and contribute to fixed costs.

In Perfectly Competitive Markets, If the Price Is _______