Which of the following statements best reflects the production decision of a profit-maximising firm in a competitive market when price falls below the minimum of average variable cost?
A) the firm will immediately stop production to minimise its losses
B) the firm will continue to produce to attempt to pay fixed costs
C) the firm will stop production as soon as it is able to pay its sunk costs
D) the firm will continue to produce in the short run, but will exit the in the long run
Correct Answer:
Verified
Q60: If P < AVC, P < ATC,
Q65: A production cost that has already been
Q66: When a firm makes a short-run decision
Q69: When a firm in a competitive market
Q69: If a business ignores some of its
Q82: When a perfectly competitive firm makes a
Q88: A profit-maximising firm in a competitive market
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents