And below the shutdown point, the firm will choose to led Russe nes ale no. mat

Question

And below the shutdown point, the firm will choose to led Russe nes ale no. mat ing 6pts) 5. Suppose that a firm in a perfectly competitive industry is making economic losses. In the short ru it will pay for the firm to continue to produce if TR SN This is because me ftum iau be minium piofit s sil cunleunnot ore out H doesnt hay tosnudoun the Coven wooud be 'n bw puce breakdoon and cbove shut Dousn rrce 8 pts) 6. Consider the following situation for a perfectly competitive firm. The price determined by the dustry is Po. MC

Explanation / Answer

This is because they can improve its total profit.
because TR=TVC is the shutdown point where the firm should have to stop producing goods.

TR=TC is breakdown point which is always greater than shutdown point

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