The decision to shut down a firm depends on whether the market price allows the firm to cover its:

Name: The decision to shut down a firm depends on whether the market price allows the firm to cover its:
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The decision to shut down a firm in the short run depends on whether the market price covers its average variable cost. If the price is below the average variable cost, the firm cannot even cover its variable costs, so it's better to shut down and minimize losses.

The Decision to Shut Down a Firm Depends on Whether