Table 12-1

Table 12-1 shows the short-run cost data of a perfectly competitive firm that produces plastic camera cases. Assume that output can only be increased in batches of 100 units.
-Refer to Table 12-1.The firm will not produce in the short run if the output price falls below
A)$8.
B)$4.
C)$3.20.
D)$2.80.

Question

Table 12-1
  
Table 12-1 shows the short-run cost data of a perfectly competitive firm that produces plastic camera cases. Assume that output can only be increased in batches of 100 units.
-Refer to Table 12-1.The firm will not produce in the short run if the output price falls below
A)$8. 
B)$4. 
C)$3.20. 
D)$2.80.

Quizplus · Accepted Answer

The firm will not produce in the short run if the output price falls below the average variable cost, which is $2.80 in this case.

Table 12-1 Table 12-1 Shows the Short-Run Cost Data of a Perfectly