If a firm shuts down in the short run, then
A) its economic profits are zero.
B) its losses are equal to its fixed costs.
C) its fixed costs are greater than its variable costs.
D) it must be the case that its revenues from operating were less than its total costs.

Question

Quizplus · Accepted Answer

When a firm shuts down in the short run, it stops production and incurs losses equal to its fixed costs, as it cannot avoid these costs.

If a Firm Shuts Down in the Short Run, Then