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If a perfectly competitive firm faces a lower wage rate in the short run, what will...

If a perfectly competitive firm faces a lower wage rate in the short run, what will happen?

The firm’s short run maximum loss will fall

The firm’s supply curve will shift up

The firm’s shut down price will fall

All of the answers are correct
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Answer #1

Answer

option 3

The firm’s shut down the price will fall

the decrease in wage rate decreases the marginal cost and shifts the supply curve to the right and down which decreases the firm's shutdown price.

It can not decrease the maximum loss as the maximum loss in the short run is equal to fixed costs.

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