When should a firm shut down? When should a firm go out of business?
What will be an ideal response?
A firm should shut down when the price per unit of output sold drops below the average variable cost per unit produced. The firm can shut down or stop producing in the short run, but it can still stay in business. In the long run, if the market price remains below the firm's shutdown point, then its owners should sell the firm's assets and go out of business.
Economics
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Cost-reducing technological advancements allow suppliers to earn more profits but have no noticeable effect on the supply curve
a. True b. False Indicate whether the statement is true or false
Economics
When price does not cover average total cost at any rate of output, the firm should shut down in the short run.
Answer the following statement true (T) or false (F)
Economics