-The above figure shows the cost curves for a competitive firm.If the firm is to operate in the short run,price must exceed
A) $0.
B) $5.
C) $10.
D) $11.

Question

-The above figure shows the cost curves for a competitive firm.If the firm is to operate in the short run,price must exceed
A) $0. 
B) $5. 
C) $10. 
D) $11.

Quizplus · Accepted Answer

For a firm to operate in the short run, the price must at least cover its variable costs. The point at which the firm's marginal cost curve intersects the average variable cost curve (the minimum point of the AVC curve) indicates the minimum price the firm would accept to keep operating in the short run. This point is at $5, making B the correct answer.

-The Above Figure Shows the Cost Curves for a Competitive