If a firm shuts down, it
A)will suffer a loss equal to its fixed costs.
B)will produce nothing but must pay its variable costs.
C)will produce nothing but must pay its fixed and variable costs.
D)will earn enough revenue to cover its variable costs but not all of its fixed costs.

Question

Quizplus · Accepted Answer

When a firm shuts down, it ceases production and incurs a loss equal to its fixed costs, as it no longer covers any variable costs.

If a Firm Shuts Down, It