If, for a Given Output Level, a Perfectly Competitive Firm's

question 153

Multiple Choice

If, for a given output level, a perfectly competitive firm's price is less than its average variable cost, the firm

• A)is earning a profit.
• B)should shut down.
• C)should increase output.
• D)should increase price.

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Definitions:

Trade

The act of buying, selling, or exchanging goods and services between people, firms, or countries.

Trade

The exchange of goods and services between people or entities, often in the context of international markets.

Resource Constraints

Limitations on the availability of resources, such as time, money, and materials, that affect decision-making and outcomes.

Self-Sufficient

The ability of an individual or a community to provide for all of their needs, particularly in terms of producing food, without relying on external sources.