Author Question: If the price of its product falls below the minimum point on the AVC curve, the best a perfectly ... (Read 81 times)

mmm · **on:** Jun 29, 2018

If the price of its product falls below the minimum point on the AVC curve, the best a perfectly competitive firm can do is to

A) keep producing and incur an economic loss equal to its total variable cost.
B) keep producing and incur an economic loss equal to its total fixed cost.
C) shut down and incur an economic loss equal to its total variable cost.
D) shut down and incur an economic loss equal to its total fixed cost.

Question 2

If marginal revenue equals zero, then demand at this level of output is

A) perfectly inelastic.
B) inelastic.
C) unit elastic.
D) elastic.