With which of the following scenarios should a perfectly competitive firm shut down in the short run?
i. p = $80, vc = $180,000, and q = 2,000
ii. tr = $45,000, avc = $500, atc = $600, and q = 84
iii. p = $11.55, atc = $15, and afc = $2

both I and II

I. P = $80, VC = $180,000, and Q = 2,000

III. P = $11.55, ATC = $15, and AFC = $2

Explanation:

In a perfectly competitive market, businesses will shut down in the short run if the unit price of their products is smaller than the variable cost of producing that product.

I: price is $80 which is less than the variable unit cost $90

II: price $535 which is larger than the variable unit cost $500

III: price $11.55 which is less than the variable unit cost $13 (= $15 - $2)

answernet income for 2017 will be greater if the inventory quantity declines;