#2015 #book-2 #cfa #cfa-level-1 #economics #schweser
Under perfect competition, the firm should shut down in the short and long run if P < average variable cost (AVC) so that TR < total variable cost (TVC).
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Parent (intermediate) annotation
Open itrfect competition:
The breakeven quantity of production is the quantity for which price (P) = average total cost (ATC) and total revenue (TR) = total cost (TC). The firm should shut down in the long run if P < ATC so that TR < TC. <span>The firm should shut down in the short run (and the long run) if P < average variable cost (AVC) so that TR < total variable cost (TVC)
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iamcfa - (no access) - 2015 CFA Level 1 Study Schweser Book 2 - Economics, p88
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