In the long run, a firm will shut down when:
A) marginal revenue is zero
B) average total costs exceed average total revenues
C) economic profit is zero
D) marginal costs are greater than average fixed costs

Question

Quizplus · Accepted Answer

In the long run, a firm will shut down if it cannot cover its average total costs, meaning average total costs exceed average total revenues, leading to losses.

In the Long Run, a Firm Will Shut Down When