Exhibit 22-8

-Refer to Exhibit 22-8. Which of the following is true in the short run of firms A and B, two perfectly competitive firms?

Question

Exhibit 22-8
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-Refer to Exhibit 22-8. Which of the following is true in the short run of firms A and B, two perfectly competitive firms?

Quizplus · Accepted Answer

In the short run, perfectly competitive firms will continue to produce as long as they can cover their variable costs, even if they are making a loss. Without specific details from Exhibit 22-8, the general principle is that firms will continue to operate in the short run if they can cover variable costs, which both Firm A and Firm B are likely able to do based on the options provided.

Exhibit 22-8 ​

Exhibit 22-8