In the long-run, a firm must shut down if its average revenue is

  • A greater than average cost
  • B less than average variable cost
  • C equal to the minimum average revenue is
  • D equal to the average cost
jamb 2022economics

The correct answer is B. less than average variable cost

In the long-run, a firm shut down if its average revenue ( price) is less than average variable cost. A firm shut down, when it is unable to cover its average variable cost or average cost or Average fixed cost is zero(0).

Previous question Next question