Question 9 Which of the following is(are) correct? A competitive firm will exit the market in the long-run if economic profit is zero. A competitive firm will shut down in the short-run if the price is below average total cost. A: 1 only B: 2 only C: Both 1 and 2 D: Neither 1 nor 2

Question 9 Which of the following is(are) correct? A competitive firm will exit the market in the long-run if economic profit is zero. A competitive firm will shut down in the short-run if the price is below average total cost. A: 1 only B: 2 only C: Both 1 and 2 D: Neither 1 nor 2

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter26: Monopolistic Competition And Oligopoly

Section: Chapter Questions

Problem 5E

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Question

Question 9

Which of the following is(are) correct?

A competitive firm will exit the market in the long-run if economic profit is zero.
A competitive firm will shut down in the short-run if the price is below average total cost.

A: 1 only

B: 2 only

C: Both 1 and 2

D: Neither 1 nor 2

Definition Definition Total cost of producing a certain quantity of a good, divided by the quantity produced. It is the sum of all costs (fixed and variable) required to produce one unit of output.

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