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Indicate whether the statement is true or false and explain why. A competitive firm that is incurring a loss should immediately cease operations.

It is false because a competitive firm that is incurring a loss should not stop its operations immediately. Such a company will continue to produce in the short term even if the price, P, is less than the average total cost (ATC). In such a situation, if the company shuts down its operations, then it will incur a high loss because of the capital invested in the business. The company should continue to operate until the price is above the average variable cost, AVC.

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Academic.Tips. (2022) 'Indicate whether the statement is true or false and explain why. A competitive firm that is incurring a loss should immediately cease operations'. 22 November.

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Academic.Tips. (2022, November 22). Indicate whether the statement is true or false and explain why. A competitive firm that is incurring a loss should immediately cease operations. https://academic.tips/question/indicate-whether-the-statement-is-true-or-false-and-explain-why-a-competitive-firm-that-is-incurring-a-loss-should-immediately-cease-operations/

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Academic.Tips. 2022. "Indicate whether the statement is true or false and explain why. A competitive firm that is incurring a loss should immediately cease operations." November 22, 2022. https://academic.tips/question/indicate-whether-the-statement-is-true-or-false-and-explain-why-a-competitive-firm-that-is-incurring-a-loss-should-immediately-cease-operations/.

1. Academic.Tips. "Indicate whether the statement is true or false and explain why. A competitive firm that is incurring a loss should immediately cease operations." November 22, 2022. https://academic.tips/question/indicate-whether-the-statement-is-true-or-false-and-explain-why-a-competitive-firm-that-is-incurring-a-loss-should-immediately-cease-operations/.


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Academic.Tips. "Indicate whether the statement is true or false and explain why. A competitive firm that is incurring a loss should immediately cease operations." November 22, 2022. https://academic.tips/question/indicate-whether-the-statement-is-true-or-false-and-explain-why-a-competitive-firm-that-is-incurring-a-loss-should-immediately-cease-operations/.

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"Indicate whether the statement is true or false and explain why. A competitive firm that is incurring a loss should immediately cease operations." Academic.Tips, 22 Nov. 2022, academic.tips/question/indicate-whether-the-statement-is-true-or-false-and-explain-why-a-competitive-firm-that-is-incurring-a-loss-should-immediately-cease-operations/.

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