Even when a firm produces the level of output at which price equals marginal cost, it should shut down if its total revenue is less than its:
A)marginal cost.
B)fixed cost.
C)variable cost.
D)total cost.

Question

Quizplus · Accepted Answer

The firm must pay fixed costs whether it operates or not. As long as the firm is covering its variable cost, it should produce a positive level of output. Otherwise, it should shut down.

Even When a Firm Produces the Level of Output at Which