The diagram below, shows the cost structure for a firm in perfect competition. Assume that the market price is £12. What should the firm do in the short- and log run if the price falls to 10? a. It should exit in the short run and also in the long run. b. It should keep operating in the short run but exit in the long run. c. It should keep operating both in the short- and the long run. d. We need more information to decide such an important question.
The diagram below, shows the cost structure for a firm in perfect competition. Assume that the market price is £12. What should the firm do in the short- and log run if the price falls to 10? a. It should exit in the short run and also in the long run. b. It should keep operating in the short run but exit in the long run. c. It should keep operating both in the short- and the long run. d. We need more information to decide such an important question.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
The diagram below, shows the cost structure for a firm in
Assume that the market
What should the firm do in the short- and log run if the price falls to 10?
a. It should exit in the short run and also in the long run.
b. It should keep operating in the short run but exit in the long run.
c. It should keep operating both in the short- and the long run.
d. We need more information to decide such an important question.
Transcribed Image Text:Taggec
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12
abo
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48
60
72
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