In the short run, a firm operating in a competitive industry will produce the quantity of output where price equals marginal cost as long as the
A)price is less than average total cost.
B)marginal revenue exceeds the marginal cost.
C)price is greater than average variable cost.
D)price is greater than average fixed cost but less than average variable cost.

Question

Quizplus · Accepted Answer

In the short run, a firm in a competitive industry will produce where price equals marginal cost as long as the price is greater than average variable cost, ensuring that the firm covers its variable costs and contributes to fixed costs.

In the Short Run, a Firm Operating in a Competitive