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If the Price Is Consistently Below the Average Variable Cost,then

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If the price is consistently below the average variable cost,then in the short run a perfectly competitive firm should:


Definitions:

Required Return

The minimum expected return an investor demands for investing in a particular asset, factoring in its risk.

Discount Rate

The discount rate applied in the calculation of the present value of future cash flows in a DCF analysis.

Constant Growth Rate

An assumption in certain financial models that estimates an investment's dividends or cash flows will grow at a steady, unending rate.

Constant Growth Rate

A steady rate at which a variable, such as company earnings or dividends, increases over a specific period.

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