Which of the Following Represents the Firm's Short-Run Condition for Shutting

question 603

Multiple Choice

Which of the following represents the firm's short-run condition for shutting down?

• A)shut down if TR < TC
• B)shut down if TR < FC
• C)shut down if P < ATC
• D)shut down if TR < VC

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Definitions:

Cost Of Goods Sold

The immediate expenses linked to the manufacturing of goods a company sells, encompassing costs for materials and labor.

Current Assets

Short-term assets that a company owns, which are expected to be converted into cash within one year, such as inventory, cash, and accounts receivable.

Average Collection Period

A financial metric that measures the average number of days it takes a company to collect payments from its credit sales.

Fixed Assets

Long-term tangible assets held for business use and not expected to be converted to cash in the upcoming fiscal year, such as machinery, buildings, and land.