If a firm cannot earn profits in the short run, it will shut down
Indicate whether the statement is true or false
False. A firm will operate at a loss if the loss incurred from production is less than the loss incurred from shutting down. Even if the firm shuts down, it still must pay its fixed costs because, in the short run, going out of business is not an option.
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According to the 2009 hamburger standard, the country with the most overvalued currency relative to the United States dollar was
A. China. B. Norway. C. Australia. D. Japan.
Figure 10-8
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In the long run, the perfectly competitive firm in Figure 10-8 will leave the industry if the price falls below
A. $10. B. $9. C. $5. D. $2.
If firms are producing at a profit-maximizing level of output where the price is equal to the average total cost:
A. accounting profits may be negative. B. accounting profits must be zero. C. economic profits may be positive. D. economic profits must be zero.
A utility possibilities frontier need not incorporate the utility of every individual.
A. True B. False C. Uncertain