In the short run, if a firm shuts down its maximum loss equals the amount of its fixed cost.

Name: In the short run, if a firm shuts down its maximum loss equals the amount of its fixed cost.
Brand: Quizplus
Rating: 4.8 (41 reviews)

Question

Quizplus · Accepted Answer

In the short run, a firm's total variable costs can be reduced to zero by shutting down, but its fixed costs remain the same. Therefore, the firm's maximum loss would be equal to its fixed cost if it chooses to shut down.

In the Short Run, If a Firm Shuts Down Its