Which of the following production decisions is a profit-maximizing firm in a competitive market most likely to take when price falls below the minimum of average variable cost?

Question

Answer

The firm will stop production as soon as it is able to pay its sunk costs.

Answer

The firm will immediately stop production to minimize its losses.

Answer

The firm will continue to produce to attempt to pay fixed costs.

Answer

none of the above

Answer

The firm will continue to produce in the short run but will likely exit the market in the long run.

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Which of the following production decisions is a profit-maximizing firm in a com...

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