If the market price in a competitive market is below the minimum of average variable cost, the firm will shut down
Indicate whether the statement is true or false
True . At this price total fixed costs are smaller than the operating loss. It pays for the firm to shut down.
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When the price of a good is
A) below the equilibrium price, quantity supplied exceeds quantity demanded and price rises. B) below the equilibrium price, quantity demanded exceeds quantity supplied and price falls. C) above the equilibrium price, quantity supplied exceeds quantity demanded and price falls. D) above the equilibrium price, quantity demanded exceeds quantity supplied and price rises.
Fixed costs of entry create an advantage for potential entrants since incumbents have already made these expenditures while potential entrants can avoid these costs
Indicate whether the statement is true or false