Question 31 Refer to the following figure: Price -- - Q 0, 0, 0, 0, Quantity...

Question

Question

Question 31 Refer to the following figure: Price -- - Q 0, 0, 0, 0, Quantity The perfectly competitive firm should shut down

Answer 1

Answer #1

Firm's shut down point is when MR = MC = AVC

Firm's break even point is when MR = MC = ATC

Thus firm must shut down if its lies below its shut down point or the price is below P1, thus option D is correct.

Answer 2

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