Question

A purely competitive firm should produce in the short run if its total revenue is sufficient to cover its:

A.
total fixed costs.
B.
total costs.
C.
marginal costs
D.
total variable costs.

Answer 1

D. total variable costs

Step-by-step explanation:

A purely competitive firm should produce in the short run if its total revenue is sufficient to cover its total variable costs.

In short run, fixed cost had to be incurred even if it shuts down. So it should operate as long as price is greater than average variable cost.