Which statement is false?
A)A firm will shut down when variable cost is greater than total revenue.
B)In the long run all costs become variable costs.
C)When the firm shuts down,output is zero.
D)None of the statements are false.

Question

Quizplus · Accepted Answer

All the statements provided are true. A firm will indeed shut down in the short run if the variable cost exceeds total revenue, as continuing operations would lead to greater losses than the fixed costs of shutting down. In the long run, all costs are considered variable because firms have the flexibility to adjust all inputs. When a firm shuts down, it ceases production, hence output is zero.

Which Statement Is False