A perfectly competitive firm will shut down when the price is just below the minimum point on the
A) average fixed cost curve.
B) average total cost curve.
C) marginal cost curve.
D) average variable cost curve.
E) marginal revenue curve.

Question

Quizplus · Accepted Answer

A perfectly competitive firm will shut down in the short run if the price falls below the minimum point on the average variable cost curve, as it cannot cover its variable costs.

A Perfectly Competitive Firm Will Shut Down When the Price