If a Firm Has No ______ Costs,then the Profit from Shutting

question 36

Multiple Choice

If a firm has no ______ costs,then the profit from shutting down is zero.

• A) Fixed
• B) Variable
• C) Opportunity
• D) Sunk

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Definitions:

Profit

The financial gain achieved when the revenue from business activities exceeds the expenses, costs, and taxes needed to sustain the activity.

Marginal Cost

The escalation in cumulative price involved in fabricating one extra unit of a product or service.

Average Revenue

The amount of income generated per unit of sale or service offered, calculated by dividing total revenue by the number of units sold.

Profit Maximizes

The process by which a firm determines the price and output level that leads to the highest profit.