Question

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text alternative
multiple choice question
this graph illustrates that a firm can minimize its losses by producing where _______.
o price exceeds minimum average total cost but is less than average fixed cost
o price exceeds minimum average variable cost but is less than marginal cost
o price exceeds minimum average variable cost but is less than average total cost
o price equals minimum average variable cost but is less than minimum average total cost

Explanation:

In a perfectly - competitive market, a firm will minimize its losses in the short - run when price exceeds minimum average variable cost but is less than average total cost. If price is above minimum average variable cost, the firm can cover some of its fixed costs by producing. If it shuts down, it will incur losses equal to its total fixed costs.

Answer:

price exceeds minimum average variable cost but is less than average total cost