A firm is indifferent between staying in business and shutting down in the short run when,at the loss-minimizing level of output,
A)total revenue equals total cost
B)average total cost is at its minimum
C)total revenue exceeds total cost
D)total revenue equals total variable cost
E)total variable cost equals total cost

Question

Quizplus · Accepted Answer

In the short run, a firm is indifferent between staying in business and shutting down when total revenue equals total variable cost, as it can cover its variable costs but not its fixed costs.

A Firm Is Indifferent Between Staying in Business and Shutting