If price is less than a perfectly competitive firm's average total cost, the firm will continue...

If price is less than a perfectly competitive firm's average total cost,

		the firm will continue to produce if price is greater than average variable cost.
		the firm will shut down.
		the firm will exit the industry in the short run.
		the firm will continue to produce as long as price is greater than average fixed cost.

Solutions

Expert Solution

Perfect competitive market is a market place with large number of buyers and sellers in the market and price is decided by the market forces that is demand and supply and for a firm to operate in this market themarket price should must be greater than average variable cost

If a firm is having price less than the average variable cost then the firm will go for shutdown

So the answer here is is option B

Rahul Sunny answered 1 year ago

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