A competitive ﬁrm will make losses when _____.
A) its short-run average total cost is above the market price
B) its ﬁxed cost is positive but variable costs are negligible
C) the market price is above marginal cost
D) total revenue is greater than total costs

Question

Quizplus · Accepted Answer

A competitive firm will make losses when its short-run average total cost is above the market price, as it cannot cover all its costs at that price.

A Competitive ﬁRm Will Make Losses When _____