The following question are based on the following diagram showing the short-run cost curves for a perfectly competitive firm:

-At what price per unit would the firm find it no more profitable to operate than NOT to operate?

Question

The following question are based on the following diagram showing the short-run cost curves for a perfectly competitive firm:
 
-At what price per unit would the firm find it no more profitable to operate than NOT to operate?

Quizplus · Accepted Answer

The price at which a firm finds it no more profitable to operate than not to operate is the price that covers its variable costs. At this price, the firm is able to cover the costs that vary with production but not its fixed costs. This is often referred to as the shutdown point. Without specific details about the firm's cost structure, it's impossible to determine the exact price. However, the question seems to be theoretical, and in such cases, the correct answer is typically the one that represents a threshold or a concept being tested, which in this context is the price covering variable costs.

The Following Question Are Based on the Following Diagram Showing