Explain why shutting down and going out-of-business are different concepts
What will be an ideal response?
Shutting down means that the firm seizes production with the option of starting up production any time in the future. Going out-of-business is equal to exiting the industry. This involves reducing the amount of (the fixed input) capital to zero, which is not possible in the short run.
You might also like to view...
Individual members of a cartel have an incentive to ____ the cartel agreement because pursuit of ____ will maximize individual profit
a. adhere to; self-interest b. cheat on; collective interest c. cheat on; self-interest d. adhere to; collective interest
The natural rate of unemployment is
a. the rate of unemployment caused by frictional plus structural unemployment b. the actual rate of unemployment less structural unemployment c. structural, frictional, and cyclical unemployment d. full employment less structural unemployment e. the civilian population that is out of work and actively seeking a job