The Figure Given Below Shows the Revenue and Cost Curves

question 92

Multiple Choice

The figure given below shows the revenue and cost curves of a perfectly competitive firm.Figure 10.2
MC: Marginal cost curve
MR: Marginal revenue curve
ATC: Average-total-cost curve
AVC: Average-variable-cost curve
-A perfectly competitive firm decides to shut down if:

• A)the price falls below the average-total-cost.
• B)average revenue falls below the average-variable-cost.
• C)the price falls below the marginal cost.
• D)the average revenue curve lies below the marginal cost curve.
• E)the total revenue is less than total cost.

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Definitions:

Limited Liability

A legal structure where a company's owners are protected from personal responsibility for the company’s debts or liabilities, beyond the amount of their investment in the company.

Voluntary Contract

An agreement entered into freely by two or more parties, where each party has the ability to accept or reject the terms of the agreement.

Competent Persons

Individuals who have the necessary ability, knowledge, or qualifications to perform a specific task or duty effectively.

Proportionately Shared

Equitably distributed or allocated among participants according to their respective shares, responsibilities, or contributions.