If a perfectly competitive firm is producing an output in the short run in which the market price is less than the firm's average total cost, which of the following events will occur?

Question

Accepted Answer

The firm will continue to produce if the price exceeds minimum average variable cost.

Answer

The firm is breaking even but it will continue to produce.

Answer

The firm will shut down in the short run.

Answer

The firm is still making a positive economic profit.

Answer

The firm will continue to produce if the price exceeds average fixed cost.

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If a perfectly competitive firm is producing an output in the short run in which...

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