Identify the factors that a firm must consider before shutting down an unprofitable business
What will be an ideal response?
There are times when keeping a money-losing factory open is the best choice. The firm should keep the factory open if the total revenue from the goods the factory produces is greater than the cost of keeping it open. the benefit of operating the facility is greater than the variable cost, so it makes sense to keep the facility running.
You might also like to view...
Which of the following statements about supply curves is CORRECT? I. A supply curve also can be a marginal cost curve. II. A supply curve tells the quantity of other goods and services that sellers must give up to produce another unit of the good
A) I only B) II only C) both I and II D) neither I nor II
A price floor set below the equilibrium price causes a surplus in the market
a. True b. False Indicate whether the statement is true or false
If the law of increasing opportunity costs is operable, and currently the opportunity cost of producing the 1,000th unit of good X is 0.5Y, then the opportunity cost of producing the 2,001st unit of good is X is most likely to be
A) less than 0.5Y. B) more than 0.5Y but less than 2Y. C) more than 0.5Y D) less than 0.5Y but more than zero. E) none of the above
Which of the following statements is false?
A) Another term for a Treasury bill is a T-bill. B) Treasury notes mature in 2 to 10 years. C) Treasury bonds are considered very safe investments, but Treasury bills are considered to be a more risky investment. D) It is unlikely the federal government will default on its bond obligations.