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...
Refer to Figure 26-11. In the dynamic model of AD-AS in the figure above, the economy is at point A in year 1 and is expected to go to point B in year 2, and the Federal Reserve pursues policy. This will result in
A) real GDP lower than what would occur if no policy had been pursued. B) short-term interest rates higher than what would occur if no policy had been pursued. C) unemployment rates higher than what would occur if no policy had been pursued. D) inflation higher than what would occur if no policy had been pursued.
A Eurocurrency is a
A) bank account denominated in a currency other than the nation in which the deposit is located. B) bank account in the eurozone. C) bank account denominated in euros in the EU. D) bank account located in England.