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Answer the Following Questions with Respect to Falling Prices

Question 149

Essay

Answer the following questions with respect to falling prices:
a)What will the firm in a perfect competitive industry do if the price of the product drops?
b)When is a firm still profitable?
c)When does the firm experience a loss?
d)When should the firm shutdown?

Correct Answer:

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a)The firm will to cut production and ac...

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