Initially, the market price is p= 18, and the competitive firm's average variable cost is 16,...
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Initially, the market price is p= 18, and the competitive firm's average variable cost is 16, while its average cost is 19. Should it shut down? Why? This firm should OA. shut down because average cost is greater than the market price. OB. shut down because average fixed cost is less than the market price. OC. not shut down because average cost is greater than average variable cost. OD. not shut down because average fixed cost is less than the market price. OE. not shut down because average variable cost is less than the market price. Initially, the market price is p= 18, and the competitive firm's average variable cost is 16, while its average cost is 19. Should it shut down? Why? This firm should OA. shut down because average cost is greater than the market price. OB. shut down because average fixed cost is less than the market price. OC. not shut down because average cost is greater than average variable cost. OD. not shut down because average fixed cost is less than the market price. OE. not shut down because average variable cost is less than the market price.
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Answer rating: 100% (QA)
ANSWER A Shutdown because the average cost is greater than the market price Conventionally stated th... View the full answer
Related Book For
Managerial Economics and Strategy
ISBN: 978-0321566447
1st edition
Authors: Jeffrey M. Perloff, James A. Brander
Posted Date:
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