Question

In which market structure will a firm choose not to shut down when price is less than average variable cost?

Answer 1

The market structure in which a firm will choose not to shut down when price is less than average variable cost is:

None of the above. All firms will shut down when Price < AVC.

To add, in economics, average variable cost (AVC) is a firm's variable costs (labor, electricity, etc.) divided by the quantity of output produced.