A Perfectly Competitive Firm Will Continue to Operate in the Short

question 8

Multiple Choice

A perfectly competitive firm will continue to operate in the short run when the market price is below its average total cost if the

• A) marginal revenue is greater than marginal cost.
• B) price is at least equal to the minimum average variable cost.
• C) total fixed costs are less than total revenue.
• D) marginal cost is minimized.
• E) price is also less than the minimum average variable cost.

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Definitions:

Enforceable Agreement

A legally binding contract that can be upheld and compelled by law in a court of justice.

Earnest

Serious in intention, purpose, or effort; sincerely zealous.

Sale of Goods Act

Legislation that regulates the sale of goods, ensuring rights, obligations, and remedies in commercial transactions, making sure products sold are as advertised and fit for purpose.