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18 February, 00:30

In order to continue operating, in the long-run a firm must a. Charge a price equal to its AVC b. Charge a price equal to its AFC c. Charge a price equal to its AC d. None of the above

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  1. 18 February, 04:15
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    The answer is option A)

    In order to continue operating, in the long-run a firm must A) Charge a price equal to its AVC

    Explanation:

    In order to continue operating, in the long-run a firm must charge a price equal to its Average Variable cost AVC.

    This is because, a long run is a period of time in which all factors of production and costs are variable.

    Over the long run, a firm will search for the production technology that allows it to produce the desired level of output at the lowest cost. If a company is not producing at its lowest cost possible, it may lose market share to competitors that are able to produce and sell at minimum cost.
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