If a Firm Shuts Down in the Short Run,then

question 29

Multiple Choice

If a firm shuts down in the short run,then:

• A)total revenue and total cost will fall to zero.
• B)profit will equal zero.
• C)profit will equal negative fixed costs.
• D)profit will equal negative variable costs.

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Definitions:

Profitability Index

A financial metric that measures the return on investment for a project or investment relative to its cost.

Investment Projects

Initiatives undertaken by corporations or investors that involve significant capital outlay with the expectation of earning a return on investment over time.

Discount Factor

A multiplier used to determine the present value of future cash flows, reflecting the time value of money.

Rate Of Return

The gain or loss of an investment over a specified period, expressed as a percentage of the investment's cost.