Practicing Success
Practicing Success
CUET Preparation Today
| A firm producing women handbags faces a perfectly competitive market in the economy. It finds that price of the handbag in short run, is less than the average variable cost incurred by the firm in production of the bag. Also in long run, price is less than the average cost incurred to produce the bag. Should the firm continue operating in the market on the same pace or should either do some alterations in revenue/cost structure or shut down its operations. |
The firm should continue operating in the market on the same pace. The firm should either do some alterations in revenue/cost structure or shut down its operations. Can't say None of these |
| The firm should either do some alterations in revenue/cost structure or shut down its operations. |
| The situation indicates firm is incurring loss by operating, i.e. if the firm is shut down it will incur less loss. |
