Exhibit 8.9

-Refer to Exhibit 8.9,which shows a perfectly competitive firm's short-run output decisions.The firm is indifferent between producing and shutting down at point _____

Question

Exhibit 8.9
 
-Refer to Exhibit 8.9,which shows a perfectly competitive firm's short-run output decisions.The firm is indifferent between producing and shutting down at point _____

Quizplus · Accepted Answer

In a perfectly competitive market, a firm is indifferent between producing and shutting down when the price equals the minimum average variable cost (AVC). This is typically represented by the shutdown point on a graph, which is point 2 in Exhibit 8.9.

Exhibit 8.9 -Refer to Exhibit 8.9,which Shows a Perfectly Competitive Firm's Short-Run