A firm that has not shut down in the short run will not shut down in response to a decrease in the marginal costs.

Name: A firm that has not shut down in the short run will not shut down in response to a decrease in the marginal costs.
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Question

Quizplus · Accepted Answer

A decrease in marginal costs would make production more efficient, potentially increasing profitability, and thus, there would be less incentive for a firm to shut down.

A Firm That Has Not Shut Down in the Short