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Answer to Question #325847 in Microeconomics for Pride

Question #325847

How does a firm decide whether to shut down production if it has zero fixed cost? What is the implication on entry and exit in this industry?

1
Expert's answer
2022-04-08T09:02:52-0400

A firm decides whether to shut down production, if price is lower than its average variable cost (P < AVC).


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