Ask Question
11 December, 02:42

When a perfectly competitive firm finds that its market price is below its minimum average variable cost, it will sell A) the output where marginal revenue equals marginal cost. B) the output whop average total cost equals price. C) any positive output the entrepreneur decides upon because all of it can be sold. D) nothing at all; the firm shuts down.

+3
Answers (1)
  1. 11 December, 02:43
    0
    Answer: When a perfectly competitive firm finds that its market price is below its minimum average variable cost, it will sell D. nothing at all; the firm shuts down.

    Explanation: A perfectly competitive firm does not exist because it a theoretical market structure where all firms sell the same product, they are price takers, the market has no influence on price and there is full freedom. If the market price is below what it will cost to produce the products, the firms will stop producing their products and shut down.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “When a perfectly competitive firm finds that its market price is below its minimum average variable cost, it will sell A) the output where ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers