If revenue in the short run is less than variable costs, what should the firm do?
What will be an ideal response?
The firm should shut down to minimize losses (i.e., loss equal to fixed costs only).
Economics
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The incidence of a per-unit tax on a good is identical for buyers and sellers of the good if:
A) the buyers and sellers of the good are equally sensitive to price changes. B) the elasticity of market demand exceeds the elasticity of market supply. C) the market supply curve is flatter than the market demand curve. D) the market demand curve is horizontal.
Economics
For this question, assume that the aggregate production function is represented by Y = A. Which of the following represents the marginal cost of producing an additional unit of output?
A) W B) W/A C) A/W D) (1 + A)W E) 1/W
Economics