Which one of the following is the shut-down condition for a profit maximizing firm in a perfectly competitive market? ( = Price, = Average Variable Cost, = Average Total Cost)
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1 mark, −0.333MicroeconomicsPerfect competitionProfit maximisation and the competitive firmModerateabout 1 min
IIT JAM 2025 Question 5: Perfect competition
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Which one of the following is the shut-down condition for a profit maximizing firm in a perfectly competitive market? (P = Price, AVC = Average Variable Cost, ATC = Average Total Cost) (A) P < AVC (B) P > AVC (C) P < ATC (D) P > ATC
Perfect competition has come up 115 times in 7 exams since 2006.
What this question tests
This question is on Profit maximisation and the competitive firm, part of Perfect competition in Microeconomics.
How a price-taking firm picks output where price equals marginal cost, and when it breaks even or shuts down.
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