Answer the Following Questions with Respect to Falling Prices

question 151

Essay

Answer the following questions with respect to falling prices:
a)What will the firm in a perfect competitive industry do if the price of the product drops?
b)When is a firm still profitable?
c)When does the firm experience a loss?
d)When should the firm shutdown?

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Definitions:

Member States

Countries or regions that are part of a larger federation, union, or association and abide by its regulations and benefit from its provisions.

Mailbox Rule

A legal principle stating that an offer is considered accepted once the acceptance is dispatched, not when it is received by the offeror.

Acceptance

In contract law, it refers to the act of agreeing to the terms of an offer, thereby creating a binding contract.

Valid Acceptance

An agreement to the terms of an offer in contract law, which results in a binding contract between the parties.