When a Perfectly Competitive Firm Makes a Decision to Shut

question 72

Multiple Choice

When a perfectly competitive firm makes a decision to shut down, it is most likely that:

• A)price is below the minimum of average variable cost
• B)marginal cost is above average variable cost
• C)fixed costs exceed variable costs
• D)average fixed costs are rising

---

Definitions:

Responsiveness

The ability of a company, service, or product to react quickly and positively to customer needs or changes in the market.

Reliability

The consistency and dependability of a product, service, or system to perform as expected under certain conditions.

Voice-of-customer

Voice-of-customer entails gathering insights and feedback directly from consumers to understand their needs, preferences, and experiences.

Quality Gap Analysis

The process of assessing the difference between the existing quality of products or services and the expected quality.