In the short run, a proﬁt-maximizing ﬁrm will stop production if it cannot recover its average ﬁxed costs.

Name: In the short run, a proﬁt-maximizing ﬁrm will stop production if it cannot recover its average ﬁxed costs.
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In the short run, a profit-maximizing firm will stop production if it cannot recover its variable costs. It will continue to produce as long as it can cover its average variable costs, even if it cannot cover its total costs (including fixed costs).

In the Short Run, a Proﬁt-Maximizing ﬁRm Will Stop Production