If Price Is Less Than Its Minimum Average Variable Cost

question 78

Multiple Choice

If price is less than its minimum average variable cost, a perfectly competitive firm that continues to produce in the short run

• A)cannot cover any of its variable cost
• B)incurs a loss greater than its fixed cost
• C)can cover all of its fixed cost and some of its variable cost
• D)can cover all of its variable cost and some of its fixed cost
• E)can cover both its fixed costs and its variable cost

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