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A firm operating in a perfectly competitive industry will continue to operate in the short run but earn losses if the market price is less than that firm's average total cost but greater than the firm's average variable cost. True or false?

Respuesta :

Answer:

True

Explanation:

However, If price remains above average variable cost, then the firm generates enough revenue to pay all variable cost, plus a portion of fixed cost. So it produces the quantity that equates marginal revenue and marginal cost.

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