Consider the following total cost schedule for a perfectly competitive firm producing ball-point pens.
TABLE 9-3
-Refer to Table 9-3.This firm would produce no output in the short run if the market price of its output
A)dropped below $0.15.
B)dropped below $0.20.
C)dropped below $0.30.
D)dropped below $2.00.
E)dropped below $3.00.

Question

Consider the following total cost schedule for a perfectly competitive firm producing ball-point pens.
  TABLE 9-3
-Refer to Table 9-3.This firm would produce no output in the short run if the market price of its output
A)dropped below $0.15. 
B)dropped below $0.20. 
C)dropped below $0.30. 
D)dropped below $2.00. 
E)dropped below $3.00.

Quizplus · Accepted Answer

The firm would produce no output in the short run if the market price of its output dropped below $0.15 because at that price, the firm would be making a loss.

Consider the Following Total Cost Schedule for a Perfectly Competitive