If a perfectly competitive firm incurs an economic loss,it should
A)shut down immediately.
B)try to raise its price.
C)shut down in the long run.
D)shut down if this loss exceeds fixed cost.

Question

Quizplus · Accepted Answer

A perfectly competitive firm should shut down if its economic loss exceeds its fixed costs, as it would be better off not producing and only incurring fixed costs rather than continuing to produce and incurring greater losses.

If a Perfectly Competitive Firm Incurs an Economic Loss,it Should