In which scenario can a perfectly competitive firm continue to produce in the short term, even though it would mean economic losses (where P = price, AVC = average variable costs, and ATC = average total cost)?

a. P < AVC but P > ATC
b. P = AVC + ATC
c. P > ATC – AVC
d. P > AVC but P < ATC


d. P > AVC but P < ATC

If P > AVC but P < ATC, then the firm continues to produce in the short run, resulting in economic
losses.

Economics

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Economics