In the short-run,a firm's decision to shut-down should not take into consideration
A)Avoidable costs
B)Variable costs
C)Fixed costs
D)Marginal costs

Question

​In the short-run,a firm's decision to shut-down should not take into consideration
A)​Avoidable costs
B)Variable costs
C)Fixed costs
D)​Marginal costs

Quizplus · Accepted Answer

In the short-run, a firm's decision to shut down should not take into consideration fixed costs because these costs are incurred regardless of the firm's level of production. Fixed costs are sunk costs in the short run, meaning they cannot be recovered whether the firm operates or not.

​In the Short-Run,a Firm's Decision to Shut-Down Should Not Take

In the Short-Run,a Firm's Decision to Shut-Down Should Not Take