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Why a firm under perfect competition

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Reference no: EM131729857

1. Why a firm under perfect competition is called price taker? How the price is determined under perfectly competitive market?

2. Explain what is shut down price. How does it guide a firm in its decision whether to continue to operate or make exit in case the firm under perfectly competitive market in the short run incurs loses? Use diagram.

Reference no: EM131729857

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