In the short run, in a perfectly competitive market, a firm will shut down if

Name: In the short run, in a perfectly competitive market, a firm will shut down if
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In the short run, a firm will shut down if the price (P) is less than the average variable cost (AVC) for all levels of output. This is because the firm cannot cover its variable costs and will incur losses by producing any output. It is better for the firm to shut down, pay fixed costs, and minimize losses.

In the Short Run, in a Perfectly Competitive Market, a Firm