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:

Technological Advance

The development of new technologies and improvement of existing technologies to increase productivity or address new challenges.

Market Supply Curve

A graphical representation depicting the relationship between the price of a good and the total quantity of the good that producers are willing to supply.

Marginal Cost

The increase in total cost that arises from producing one additional unit of a product or service, an important concept in economics for decision making.

Variable Input

An input in the production process that can be adjusted in the short term to change the level of output.