Question
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
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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Managerial Economics and Strategy
Authors: Jeffrey M. Perloff, James A. Brander
1st edition
978-0137036059, 133379094, 321566440, 137036051, 9780133379099, 978-0321566447
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