For all positive levels of output,when will a firm shut down in the short run

Question

Quizplus · Accepted Answer

In the short run, a firm will shut down if it cannot cover its variable costs, as it is the only cost that can be avoided in the short run. This means that if the price of the product falls below the variable cost of producing it, the firm will not even be able to cover its variable costs, let alone its fixed costs, and will, therefore, shut down.

For All Positive Levels of Output,when Will a Firm Shut