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 likely exit the market in the long run
Correct Answer:
Verified
Q104: Graph 14-6 Q105: Graph 14-6 Q106: Profit-maximising firms enter a competitive market when: Q107: A profit-maximising firm that is showing losses Q108: A production cost that has already been Q110: Prawns Galore, a prawn harvesting business in 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
A)total
