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Dear Student,
If under perfect competition, the price line lies below the average cost curve, then the firm would incur losses because the price recovered from the sale of goods is not sufficient to recover the Total Avearge Cost of producing the goods. The firm may continue its operations till it recovers at least the Average Varible Cost.
Regards,
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If under perfect competition, the price line lies below the average cost curve, then the firm would incur losses because the price recovered from the sale of goods is not sufficient to recover the Total Avearge Cost of producing the goods. The firm may continue its operations till it recovers at least the Average Varible Cost.
Regards,
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