Why would a company continue to operate for many years while never once turning a profit rather than shut down immediately? Using revenue and cost analysis, explain when the company would shut down
What will be an ideal response?
A company would continue to operate rather than shut down so long as it could cover its variable costs. If revenues did not cover all of the firm's variable costs, it would shut down.
You might also like to view...
If the Fed were to attempt to increase the money supply, it would most likely do so
A) by manipulating the discount rate. B) by manipulating the required reserve ratio. C) by altering the amount of gold held in Fort Knox. D) by engaging in open market operations.
Capital controls are most often aimed at slowing or eliminating movements of
A) reserve assets. B) foreign direct investment. C) foreign portfolio investment. D) nonreserve government assets. E) None of the above.
Matt deposits $150,000 into his bank, which has a required reserve ratio of 15 percent. Matt’s bank must keep ______ of this new deposit in its reserves.
a. $10,000 b. $127,500 c. $150,000 d. $22,500
In the market for loanable funds, the law of supply:
A. reflects that more people will choose to save the lower is the interest rate. B. reflects that more people will choose to borrow the higher is the interest rate. C. reflects that more people will choose to borrow the lower is the interest rate. D. reflects that more people will choose to save the higher is the interest rate.