Asked by
Alexis Watson
on Oct 12, 2024Verified
If price is between the break-even point and the shutdown point,in the short run the firm will
A) operate.
B) shut down.
C) stay in business.
D) go out of business.
Break-Even Point
The point at which total costs and total revenue are equal, meaning no net gain or loss is incurred from production and sales.
Shutdown Point
The shutdown point is the level of production and price at which a company's revenue only covers its variable costs, and operating at any capacity below this point would cause the firm to incur losses.
- Comprehend the factors influencing a firm's decision to either proceed with its operations or halt them in the short run.
- Acquire knowledge about the points of break-even and shutdown across short-run and long-run contexts.
Verified Answer
SD
Learning Objectives
- Comprehend the factors influencing a firm's decision to either proceed with its operations or halt them in the short run.
- Acquire knowledge about the points of break-even and shutdown across short-run and long-run contexts.