A firm that is suffering a loss should shut down immediately if total revenue (TR)is less than total variable cost (TVC).

Name: A firm that is suffering a loss should shut down immediately if total revenue (TR)is less than total variable cost (TVC).
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Question

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If a firm's total revenue is less than its total variable cost, it cannot cover its variable costs, and continuing operations would increase its losses. Therefore, it should shut down immediately to minimize losses.

A Firm That Is Suffering a Loss Should Shut Down