In which market structure will a firm choose not to shut down when price is less than average variable cost?

Name: In which market structure will a firm choose not to shut down when price is less than average variable cost?
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Question

Quizplus · Accepted Answer

In any market structure, if the price is less than the average variable cost (P < AVC), the firm will shut down in the short run because it cannot cover its variable costs, leading to losses greater than its fixed costs.

In Which Market Structure Will a Firm Choose Not to Shut