Q292
In the short run if a perfectly competitive firm finds itself operating at a loss, it will
A.
Reduce the size of its plant to lower fixed costs
B.
Raise the price of its product
C.
Shut down
D.
Continue to operate as long as it covers its variable cost
AnswerAnswer: Option D
Solution
Answer: Option D
Solution:
In the short run if a perfectly competitive firm finds itself operating at a loss, it will continue to operate as long as it covers its variable cost.