Which of the Following Does Not Apply to a Firm

question 41

Multiple Choice

Which of the following does not apply to a firm that has shut down in the short run?

• A)Variable cost is zero.
• B)Total revenue is zero.
• C)Total cost exceeds total revenue.
• D)Total cost is zero.
• E)Fixed cost is positive.

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Definitions:

Planning Budget

An initial budget created using the assumptions of a particular level of activity to guide a company's financial decisions.

Net Operating Income

A financial metric that measures a company's profitability from its core business operations, excluding the effects of financing and taxes.

Selling

The process of promoting and transferring goods or services to customers in exchange for money.

Administrative Expense

Costs related to the general operation of a company, such as salaries of executive officers, legal and corporate office expenses.