A Perfectly Competitive Firm Will Shut Down Rather Than Produce

question 10

Multiple Choice

A perfectly competitive firm will shut down rather than produce if its

• A) price is less than average variable cost.
• B) price is less than total variable cost.
• C) total revenue is less than total cost.
• D) price is less than marginal cost.

---

Definitions:

Spatial Closeness

The physical proximity or nearness of objects or individuals to one another, which can influence social interactions and relationships.

Interchangeable

Capable of being used or substituted in place of each other without significant difference or loss of function.

Paradox Of Close Relationships

The phenomenon where close relationships, which are sources of immense joy, can also be sources of significant stress and disappointment.

Mere Exposure Effect

An increase in positive feelings toward a novel stimulus (such as a person) based on frequent exposure to it.