If a Firm Shuts Down in the Short Run and Produces

question 75

Multiple Choice

If a firm shuts down in the short run and produces no output, its total cost will be

• A)zero
• B)equal to total variable cost
• C)equal to total fixed cost
• D)equal to explicit costs only
• E)impossible to calculate

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Definitions:

Quantify

To express or measure something in terms of numbers or quantities.

Capital Budgeting

The process by which investors and managers decide which significant investments or projects to undertake, based on potential profitability.

Risk

The potential for loss, damage, or any other negative occurrence that may be avoided through preemptive action.

Probability Distributions

Mathematical functions that describe all the possible values and likelihoods that a random variable can take within a given range.