A perfectly competitive firm should shut down immediately in order to incur only fixed costs whenever the price is

This question is incomplete, the options are the following:

a) Higher than the average total cost.

b) Higher than the average variable cost.

c) Lower than the break-profit point.

d) Lower than the average variable cost.

And the correct answer is the option D: Lower than the average variable cost.

Explanation:

To begin with, a perfect competitive firms works in a market that has an homogeneous product as well as a lot of sellers and consumers so therefore that they are all price takers given the forces of the market and their interactions. Moreover, in the proper graphic of the perfect competition market the different cost curves and the incomes curves will show how the market behaves according to the quantities and the prices given for those quantities. So the firm will always have to shut down the production when in the graphic the price is lower than the average variable cost given the fact that from that point down the firm will not be able for cover the fixed costs.  

answer; dividing net income by 1- t ;