In the Short Run, a Profit-Maximizing Firm Will Shut Down

question 121

True/False

In the short run, a profit-maximizing firm will shut down if its total revenue is greater than its variable costs.

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Definitions:

Equilibrium Price

The price point in the market at which the amount of goods being offered is equal to the amount of goods being sought.

Quantity Supplied

The volume of a commodity or service that sellers are ready and capable of providing at a specific price within a given period.

Surplus

An excess of production or supply over demand, often resulting in lower prices.

Cutting

The act or process of reducing something in size, amount, or extent.