The market price has fallen below a firm's average total costs, and the firm is now earning a loss. What is the best action for the firm to take in the short run?
A) Stay open as long as price is greater than average variable costs.
B) Shut down immediately and pay fixed costs only.
C) Stay open as long as total revenue is greater than fixed costs.
D) Shut down as long as price is greater than average variable costs.
Correct Answer:
Verified
Q87: In the long run, a firm should
Q88: In the short run, when a firm
Q89: The market price has fallen below a
Q90: If the market price falls below a
Q91: If a firm is earning a profit,
Q93: In the short run, a firm should
Q94: In the short run, the fixed costs
Q95: If a firm in a perfectly competitive
Q96: Of the curves displayed in the graph
Q97: In the short run, the fixed costs
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