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Perfect Competition Practice Test
•6 QuestionsQuestion
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Q1
Based on the perfectly competitive firm’s cost and price information in the table, should the firm shut down in the short run? Assume the firm is a price taker with $P = MR = $11$.
Cost Table
- Fixed cost (FC) = $25$
- Variable cost (VC) by output: $Q=0:0$, $1:9$, $2:19$, $3:30$, $4:44$, $5:65$
Based on the perfectly competitive firm’s cost and price information in the table, should the firm shut down in the short run? Assume the firm is a price taker with $P = MR = $11$.
Cost Table
- Fixed cost (FC) = $25$
- Variable cost (VC) by output: $Q=0:0$, $1:9$, $2:19$, $3:30$, $4:44$, $5:65$