"I'm losing money, but since my fixed costs are so high, I simply cannot afford to shut down." If the firm were attempting to maximize profit, what can we conclude about this decision?
A) It may be incorrect since a firm should shut down whenever price falls below average total cost in the short run.
B) It may be incorrect because a firm experiencing economic losses should never continue to operate.
C) It may be correct if the firm is covering all of its variable costs and expects the price of its product to rise in the near future.
D) It may be correct if price is less than average variable cost.
Correct Answer:
Verified
Q67: FIGURE 8-4 Q68: The figure below shows the price, marginal Q69: FIGURE 8-4 Q70: FIGURE 8-6 Q71: Darlene runs a fruit and vegetable stand Q73: For a perfectly competitive firm in short-run Q74: Under what circumstances will a profit-maximizing firm Q75: The figure below shows the price, marginal Q76: FIGURE 8-4 Q77: What is the short-run supply curve of Unlock this Answer For Free Now! View this answer and more for free by performing one of the following actions Scan the QR code to install the App and get 2 free unlocks Unlock quizzes for free by uploading documents
![]()
![]()
![]()
![]()