Refer to Table 12-1. The firm will not produce in the short run if the output price falls below

Assume you and your cousin Vinny set up a partnership and your lawyer tells you that as the owners you will each face unlimited liability. What does that mean?

A) You are each liable for organizing the business. B) Each of you could stand to lose your personal wealth if the business goes bankrupt. C) There is no legal responsibility of the business in case a customer sues, as the business is legally untouchable. D) None of these explain what unlimited liability means.

Distinguish the short run from the long run. Generally, what causes costs of production to vary with output in the short run? What generally causes costs of production to vary in the long run?

What will be an ideal response?