Question 6 A perfect competitor finds that the best it can do if it produces any output is to produce a daily output of 100 units which it will sell at the market price or AR of f10, but even then it would then make a loss. Under what circumstances would it definitely make a smaller loss if it shut down and produced nothing? a) If, at an output of 100 a day, its AVC would be above $10. b) If, at an output of 100 a day, its AFC would be above $10. c) If, at an output of 100 a day, its SAC would be above $10. d) If, at an output of 100 a day, its SMC would be above $10. Question 7 Which part of a perfect competitor's short-run marginal cost curve, SMC, is also its short- run supply curve, SS? a) The whole of the SMC curve. b) The whole of the upward sloping part of the SMC curve c) The part of the SMC curve above its intersection with the AVC curve. d) The part of the SMC curve above its intersection with the SAC curve