Microeconomics: Principles, Applications, and Tools (8th Edition)

Published by Prentice Hall
ISBN 10: 0-13294-886-9
ISBN 13: 978-0-13294-886-9

Chapter 9 - Perfect Competition - Exercises - 9.3 The Firm's Shut-Down Decision - Page 229: 3.4

Answer

operate price exceeds average variable cost. exit total cost exceeds price.

Work Step by Step

In the short run, a firm can continue its unprofitable business if it is able to cover its variable cost. A firm should exit or shut down if the total cost exceeds the price.
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