If a competitive firm finds that it maximizes short-run profits by shu
If a competitive firm finds that it maximizes short-run profits by shutting down, which of the following must be TRUE?
A) p < AVC for all levels of output. B) p < AVC only for the level of output at which p = MC. C) p < AVC only if the firm has no fixed costs. D) The firm will earn zero profit. ANSWER
A
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