in the long run, to remain in business, the price must cover all costs.
If you want to change selection, open document below and click on "Move attachment"
Open it covered in the short run (P < AVC), the firm will shut down operations and simply absorb the unavoidable fixed costs. This problem occurs at output Q 1 , which corresponds to point C where price is less than average variable cost. However, <span>in the long run, to remain in business, the price must cover all costs. Therefore, in the long run, at any price below the breakeven point, the firm will exit the market, i.e., the firm will no longer participate in the market. Point D, which corresponds to
last reprioritisation on
suggested re-reading day
started reading on
finished reading on
Do you want to join discussion? Click here to log in or create user.