Which of the following is true if a firm shuts down? i. The price is less than minimum average variable cost.
Ii) The firm is able to avoid an economic loss.
Iii) The firm incurs a loss equal to its total variable cost.

Question

Quizplus · Accepted Answer

A firm shuts down when the price is less than the minimum average variable cost, as it cannot cover its variable costs, leading to a decision to cease production temporarily.

Which of the Following Is True If a Firm Shuts