When a perfectly competitive firm makes a decision to shut down it is most likely that ...

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Economics- Phase (I & II) Demand and Supply , Market Structures Add to Study Deck

When a perfectly competitive firm makes a decision to shut down,it is most likely that

Price is below the minimum of average variable cost.

Fixed costs exceed variable costs.

Average fixed costs are rising.

Marginal cost is above average variable cost.

Explanation:

When a perfectly competitive firm makes a decision to shut down, it is most likely that a. price is below the minimum of average variable cost.average variable cost (AVC) is a firm's variable costs (labour, electricity, etc.) divided by the quantity of output produced. Variable costs are those costs which vary with the output level