If the market price falls below a firm's minimum average total cost,the firm should:

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If the market price falls below a firm's minimum average total cost, the firm should consider how to minimize its losses rather than shutting down or continuing to operate at a loss. This can be done by reducing variable costs or finding ways to increase revenue. It is preferable to continue operating in the short run, even at a loss, rather than shut down because shutting down may result in even larger losses in the long run. Paying only fixed costs is not a viable option because it does not address the loss from the variable costs.

If the Market Price Falls Below a Firm's Minimum Average