If price is greater than average variable cost and less than average total cost at the profit-maximizing quantity of output in the short run, a perfectly competitive firm will:

Question

Quizplus · Accepted Answer

When price is greater than average variable cost but less than average total cost, a perfectly competitive firm will continue to produce in the short run to cover some of its fixed costs, even though it is incurring an economic loss.

If Price Is Greater Than Average Variable Cost and Less