A firm that is losing money may consider shutting down. Why would the firm still face losses in the short run?
a. It will still need to pay variable costs.
b. It will no longer have income.
c. It has already paid for fixed costs.
d. It will not still face losses.
c. It has already paid for fixed costs.
Shutting down can reduce variable costs to zero, but in the short run, the firm has already paid for fixed costs. As a result, if the firm produces a quantity of zero, it will still have losses because it will still need to pay for its fixed costs.
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The federal government's fiscal year is _____ months long.
A. 6 B. 9 C. 12 D. 18
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a. true b. false
The cross price elasticity of demand between two goods is 2. We may conclude that
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