Lawn mowing is a perfectly competitive industry.Alex's Lawn-Mowing Service should shut down in the short run whenever his profits are negative.

Question

Quizplus · Accepted Answer

Alex's Lawn-Mowing Service should only shut down in the short run if the revenue it earns cannot cover its variable costs. If it can cover its variable costs but not its fixed costs, it should continue operating to minimize losses.

Lawn Mowing Is a Perfectly Competitive Industry