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G This gives her the advantage o x ructure.com/courses/26817/quizzes/120463/take Question 38 1 pts Calvin's Campgrounds is a firm conducting business in a competitive market. Calvin realizes he is making a loss and is trying to decide whether to shut down or stay open. He should stay open O regardless of the price being charged. O if the price being charged is less than his minimum average variable cost (AVC) if his revenues do not cover his variable costs if his revenues cover his variable costs. as long as he is making revenue. D Question 39 1 pts The demand curve for the product of a firm in a competitive market is curve for the product of a monopolist is and the demand Operfectly inelastic; downward sloping O horizontal; perfectly inelastic O downward sloping; perfectly elastic Odownward sloping: horizontal Operfectly elastic: downward sloping

Explanation / Answer

38. if his revenue covers variable cost.

Firm stays open if it is able to cover all its variable cost regardless of fixed cost. This is because firm knows that if it shut down its production then also he suffers loss of fixed cost. So, if firm is able to cover all its variable cost then it continues to operate.

39. Perfectly elastic, downward sloping

Perfectly competitive firm is price taker so price remains fixed while quantity changes. So, demand curve is parallel to x-axis or perfectly elastic. On the other hand, monopoly firm is price maker and due to this demand curve is downward sloping.

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