In the short run, a perfectly competitive firm will shut down and produce nothing if: a....

In the short run, a perfectly competitive firm will shut down and produce nothing if:

a.	economic profits equal zero.
b.	total cost exceeds total revenue.
c.	total variable cost exceeds total revenue.
d.	the market price falls below the minimum average total cost.

Expert Solution

c. Total variable cost exceeds total revenue - is correct

The firm shuts down when it is not able to cover variable cost in short run.

Rahul Sunny answered 2 years ago

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