When total revenue is less than variable costs, a firm in acompetitive market wi

Question

When total revenue is less than variable costs, a firm in acompetitive market will a. continue to operate as long as average revenue exceedmarginal cost. b.continue to operate as long as average revenue exceedsaverage fixed cost. c. shut down. d. raise its price When total revenue is less than variable costs, a firm in acompetitive market will a. continue to operate as long as average revenue exceedmarginal cost. b.continue to operate as long as average revenue exceedsaverage fixed cost. c. shut down. d. raise its price

Explanation / Answer

C. shut down Explanation A firm shuts down if the revenue it gets is less than the variablecosts of the firm.

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