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Home Questions 7SV3DGZ6ZX
Target Exam

CUET

Subject

Economics

Chapter

Micro Economics: Theory of Firms under Perfect Competition

Question:
Read the following statements about perfectly competitive market carefully.
Statement 1: Price must be greater than or equal to Average Cost (AC) in the short run.
Statement 2: Price must be greater than or equal to Average Variable Cost (AVC) in the long run.
Options:
Both the statements are true.
Both the statements are false.
Statement 1 is true and Statement 2 is false .
Statement 2 is true and Statement 1 is false.
Correct Answer:
Both the statements are false.
Explanation:
Price must be greater than or equal to AVC in the short run. Price must be greater than or equal to AC in the long run.

CUET Questions