If TR TC, a firm would ________ in the short run and ________ in the long run.
A) operate; expand
B) operate; contract
C) shut down; expand
D) shut down; contract

Question

If TR > TC, a firm would ________ in the short run and ________ in the long run.
A) operate; expand
B) operate; contract
C) shut down; expand
D) shut down; contract

Quizplus · Accepted Answer

If Total Revenue (TR) is greater than Total Cost (TC), a firm would continue to operate in the short run because it is covering its costs and making a profit. In the long run, the firm might expand to capitalize on its profitable situation.

If TR > TC, a Firm Would ________ in the Short