A competitive firm shuts down if the price of its product is less than its minim
ID: 1195178 • Letter: A
Question
A competitive firm shuts down if the price of its product is less than its minimum total cost. greater than its maximum variable cost. less than its minimum average variable cost greater than its minimum average variable cost. In competition, the marginal revenue of an individual firm is zero. equals the price of the product. exceeds the price of the product. is positive butless than the price of the product. A competitive firm's economic profitis maximized by producing the amount of output A firm 's long -runaverage cost curve Whe n long-run average costs decrease as output increases, there are pays a fixed price for all of its inputs cannot infiucncc the market price of the good that it sells. will accept ("take") the lowest pnee that its customers offer. can charge any price that it wants to charge, that is, "take" any price it wants.When a firm is considered to be a "price taker" that means that the firm When marginal cost is greater than average total cost, the marginal cost decreases as output increases. average total cost increases as output increases. average total cost decreases as output increases. marginal cost docs not changc as output increases.Explanation / Answer
6.c. A perfectly competive firm will shut down if the price of its product is less than than its minimum average variable cost.
7.b. In competition marginal revenue of an indivisual firm equals the price of the product.
8.c. Competitive firms economic profit is maximised by producing the amount of output such that marginal revenue equals marginal cost.
9.d. A firm's long-run average cost curve is all of the above.
10.a. When long-run average costs decrease as output increases, there are economies of scale.
11.b. When a firm is considered to a "price taker" that means that the firm cannot influence the market price of the good that it sells.
12.b. When marginal cost is greater than the average total cost, the average total cost increases as output increases.
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