If a perfectly competitive firm shuts down in the short run, its variable cost equals zero.

Name: If a perfectly competitive firm shuts down in the short run, its variable cost equals zero.
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In the short run, a perfectly competitive firm may shut down if its total revenue is not sufficient to cover its variable and fixed costs. However, its variable costs do not become zero as some costs such as raw materials and labor may still have been incurred even if the firm shuts down.

If a Perfectly Competitive Firm Shuts Down in the Short