If ________, a firm would either operate or shut down in the short run and contract in the long run.
A) TR TC
B) TC TR
C) AVC ATC
D) AFC AVC

Question

If ________, a firm would either operate or shut down in the short run and contract in the long run.
A) TR > TC
B) TC > TR
C) AVC > ATC
D) AFC > AVC

Quizplus · Accepted Answer

If Total Costs (TC) are greater than Total Revenue (TR), a firm would either operate or shut down in the short run depending on whether it can cover its variable costs, and it would contract in the long run because it's not covering its total costs, leading to unsustainable operations.

If ________, a Firm Would Either Operate or Shut Down