A Firm Should Not Necessarily Shut Down If

question 127

Multiple Choice

A firm should not necessarily shut down if:

• A)total revenue is less than total variable cost.
• B)losses are greater than fixed costs.
• C)the demand curve facing the firm lies below its average variable cost curve.
• D)price is less than average variable cost.
• E)losses exceed variable costs.

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Definitions:

Pizzas

A popular dish of Italian origin, consisting of a flatbread typically topped with tomato sauce, cheese, and various other ingredients, then baked.

Production Possibilities Frontier

A graphical depiction that shows the maximum quantity of one good that can be produced for every possible quantity of another good, given the available resources and technology.

Burrito

A type of Mexican street food consisting of a wheat flour tortilla wrapped or folded into a cylindrical shape to enclose fillings.

Production Possibilities Frontier

A schematic that illustrates all top production scenarios for two separate commodities, considering a range of inputs that covers resources and other contributing factors.