In the long run, what would a firm operating in a perfectly competitive environment do if its average variable cost exceeds the price of its products?It will shut downIt will increase its outputIt will decrease its outputIt will continue to function producing the same level of output

In a perfectly competitive market, what happens when the average total cost is greater than the market price?The firm shuts down immediatelyThe firm incurs an economic lossThe firm breaks evenThe firm earns an economic profit

Fill in the Blank QuestionFill in the blank question.A firm's long-run average total costs may decline over a wide range of output due to of scale.

If a perfectly competitive firm is facing a situation where the price of its product is lower than the average total cost, which of the following statements is true?Multiple ChoiceOther firms will want to enter the industry because of the economic profits generated by the firm.The firm may be earning some accounting profits, but less than what it could earn elsewhere.The firm is generating a loss, and if things are not expected to improve the firm will leave the industry.The firm may earn economic profits in the long run if it expands its plant in order to exploit economies of scale.

If the market price is below the average variable cost, the firm is:Multiple choice question.losing money in the long run and should shut down.breaking even in the short run and should shut down.making money in the short run and should keep producing.losing money in the short run and should shut down.

What is the condition for a firm to break-even in a perfectly competitive market?Price equals average variable costPrice equals marginal costPrice equals average total costPrice equals marginal revenue